What is dead stock in wholesale garments? How can retailers avoid it?

Dead stock refers to garments that have been purchased but cannot be sold — they sit in inventory, tying up capital and space without generating revenue. It is one of the most common profitability killers for boutiques.

Common causes of dead stock in ethnic wear:

• Over-buying a seasonal product (velvet in summer, mulmul in winter)
• Buying trendy styles without testing demand first
• Wrong size mix — too many small sizes when your market needs large and XL
• Colour mismatch — buying based on personal preference rather than customer feedback
• Ordering before understanding local festival demand

How to avoid dead stock:

• Start new categories with 1 catalog set — test before scaling
• Track which sizes, colours, and styles sell fastest in your market
• Follow the 80/20 rule: 80% of stock should be proven bestsellers, 20% new/experimental
• Set a 60-day review — any unsold stock gets marked down or bundled