Inventory planning
Obsolete Inventory
By the Supply Chain Manager team · Updated October 16, 2026
Obsolete inventory is stock with no realistic future demand, because the product was superseded, discontinued, expired or simply stopped selling.
Dead stock is usually the early warning: no movement for a set period, such as 90 days. Obsolete is the conclusion that it will not sell at normal prices, which normally leads to a write-down or write-off.
Obsolete inventory example
Illustrative numbers: 300 units of a phone accessory for a discontinued model, cost $6 each, have not sold in a year. Selling them to a liquidator at $1 recovers $300 of the $1,800 book value; the remaining $1,500 is a loss whether you recognize it now or later.
Why obsolete inventory matters for distributors
Obsolete stock is pure cost: it uses space, gets counted at every stocktake and sits on the balance sheet at a value it will never fetch. Clearing it early usually recovers more than waiting.
Common obsolete inventory mistakes
- Keeping obsolete stock at full value on the books.
- Not stopping replenishment of superseded SKUs when the replacement is introduced.
Examples on this page use made-up round numbers to show the calculation. They are not benchmarks or results from real businesses.