Obsolete stock refers to inventory or goods that have become outdated, unsellable, or no longer in demand. It typically occurs when products become obsolete due to technological advancements, changes in consumer preferences, or product lifecycles.
Obsolete stock ties up valuable resources and space within a company, leading to financial losses and reduced efficiency. It is often the result of poor inventory management, inaccurate forecasting, or failure to adapt to market changes.
To mitigate the negative impact of obsolete stock, businesses employ strategies such as regular inventory assessments, improved demand forecasting, efficient supply chain management, and implementing timely product phase-outs. Disposing of obsolete stock through discounting, liquidation, or recycling can help recoup some losses and make room for more profitable inventory.