What expired stock actually costs
Expired stock doesn’t whisper. It costs you — often more than you realize, because the loss compounds: the product itself, the shelf space it held, the cash tied up while it aged, the margin you’d have earned if you’d sold something saleable in its place.
Here is a short field guide to catching ageing stock before it tips into written-off.
Buckets that actually matter
- Days-to-expiry ≤ 30: priority clearance. Promote, discount, transfer to a higher-turnover branch.
- Days-to-expiry 31–60: watchlist. No action required yet, but no new POs for the same SKU.
- Days-to-expiry 61–90: healthy stock.
- Days-to-expiry > 90: fresh stock. Ignore.
FEFO: first-expired, first-out
When picking stock to fulfill an order, take from the batch closest to expiry first — not the oldest batch by receiving date. FEFO beats FIFO for anything with a sell-by date.
The Friday report
Once a week, run the near-expiry report. Only look at days-to-expiry ≤ 30. For every row, pick an action: promote, discount, transfer, or propose-for-clearance. Sunday is too late. Friday gives you the weekend to move stock.
Clearance isn’t failure — it’s the system working. Writing off 2% of stock once a quarter is cheaper than pretending 0% needs to go, and then discovering 8% on the shelf at year-end.
Build the Friday habit. The numbers on your ageing report will drop for three months. Then they’ll stabilize. That stable number — whatever it is for your business — is the true cost of holding stock, and now you can price for it.