- Measure : Dead Stock % = (Unsellable Inventory ÷ Total Inventory) × 100.
- Impact : 12‑18% of e‑commerce capital can be locked in slow‑moving stock, costing ₹200–₹300 cr annually in India.
- Fix : Deploy EdgeOS + Dark Store Mesh to track real‑time demand, trigger dynamic markdowns, and redirect excess goods to high‑velocity zones.
Introduction
In Tier‑2 and Tier‑3 Indian cities, COD and RTO pickups still dominate, making inventory the biggest hidden cost. When unsellable goods pile up, the capital invested in them is effectively dead—stifling growth and margin expansion. By quantifying the Dead Stock %, Indian e‑commerce brands can pinpoint where cash is trapped and act decisively.
Why Dead Stock Matters in India
| Factor | Impact | Example |
|---|---|---|
| High COD volume | Increases safety‑stock requirement | 30% of orders in Guwahati are COD |
| Festive rush cycles | Drives over‑ordering | 25% of inventory is booked for Diwali but sells 15% slower |
| RTO returns | Adds to unsellable pool | 8% of returns are non‑returnable due to damage |
Problem‑Solution Matrix
| Problem | Root Cause | Solution (Edgistify) |
|---|---|---|
| Slow‑moving fashion items | Mis‑forecasting local trends | EdgeOS predictive analytics |
| Excess electronics in low‑penetration areas | Over‑stocking for future demand | Dark Store Mesh redistribution |
| Seasonal décor stuck in inventory | Limited shelf‑life | NDR Management dynamic markdowns |
Calculating Dead Stock %
\[ \text{Dead Stock \%} = \left(\frac{\text{Unsellable Inventory Value}}{\text{Total Inventory Value}}\right) \times 100 \]
- Unsellable Inventory : Items that have been in stock > 180 days, are out‑of‑stock in the last 30 days, or have a return rate > 15%.
- Total Inventory : Current on‑hand value across all fulfillment centers.
Data Table: Sample Calculation
| SKU | Days in Stock | Sales (Qty) | Return Rate | Unsellable? | Inventory Value (₹) |
|---|---|---|---|---|---|
| A123 | 210 | 0 | 0% | Yes | 50,000 |
| B456 | 90 | 120 | 2% | No | 80,000 |
| C789 | 200 | 5 | 18% | Yes | 30,000 |
| Total | 160,000 |
\[ \text{Dead Stock \%} = \frac{(50,000 + 30,000)}{160,000} \times 100 = 43\% \]
43 % of capital is trapped—an alarming figure for any brand.
How EdgeOS Helps Reduce Dead Stock
- 1. Real‑time Demand Sensing – EdgeOS aggregates POS, mobile app, and marketplace data from Mumbai, Bangalore, and Guwahati to forecast micro‑regional demand.
- 2. Dynamic Re‑allocation – If a SKU shows a 70 % drop in demand, EdgeOS signals the Dark Store Mesh to move surplus stock to high‑velocity hubs.
- 3. Predictive Shrinkage Alerts – The system flags items that are likely to become unsellable before they do, allowing proactive markdowns.
Case Study: Dark Store Mesh in Guwahati
- Before : 30 % of electronics stock remained unsold for 6 months.
- After : EdgeOS‑driven redistribution cut unsellable inventory by 60 %, freeing ₹12 cr in capital.
Integrating NDR Management
Non‑Delivery Rate (NDR) spikes often precede dead stock. NDR Management within Edgistify:
- Tracks delivery success per city and courier (Delhivery, Shadowfax).
- Generates alerts when NDR > 5 %.
- Suggests alternate courier or pickup points to improve collection rates, thereby reducing unsellable COD returns.
Practical Steps for Your Brand
- 1. Audit Inventory – Run a quarterly Dead Stock % audit using the formula above.
- 2. Set Thresholds – Define a maximum acceptable Dead Stock % (e.g., 10 %).
- 3. Activate EdgeOS – Integrate your ERP with EdgeOS for real‑time analytics.
- 4. Deploy Dark Store Mesh – Create micro‑fulfillment zones in high‑potential cities.
- 5. Implement NDR Management – Optimize courier routes to reduce COD return rates.
Conclusion
Dead Stock % is not just a KPI; it’s a lens that reveals how much capital is invisible in your supply chain. For Indian e‑commerce, where COD, RTO, and regional demand volatility are high, capturing and freeing this trapped capital can mean the difference between sustainable growth and stagnant margins. By harnessing EdgeOS, Dark Store Mesh, and NDR Management, brands can turn unsellable goods from liabilities into strategic assets.