Every dollar tied up in obsolete inventory is a dollar you can’t use to grow. Here’s how to identify and eliminate the worst offenders.
Working capital is the lifeblood of distribution. And in no industry is that more evident than in materials-heavy sectors like glass, ceramics, and refractories—where inventory costs are high, lead times are long, and warehousing space comes at a premium. Yet many distributors carry hundreds of “deadweight” SKUs that do nothing but tie up capital.
Deadweight SKUs are items with little to no velocity, poor margin contribution, and no strategic value. They often come from past custom jobs, overstocked variants, or speculative purchases that didn’t pan out. The longer they sit, the more they cost you—through storage, insurance, shrinkage risk, and opportunity cost.
Let’s run the numbers. If you’re holding 3,000 units of a niche ceramic disc that hasn’t moved in 18 months and each costs $18 landed, that’s $54,000 in frozen cash. Even if you wrote them down to scrap value, the space and handling still drain your team.
So how do you identify which SKUs are dragging you down?
Start with a 4-quadrant analysis:
High velocity / high margin – Your heroes. Keep and grow.
High velocity / low margin – Consider renegotiating costs or bundling.
Low velocity / high margin – Niche but strategic. Monitor closely.
Low velocity / low margin – Deadweight. Target for removal.
For a glass distributor, deadweight might look like outdated patterns of decorative tempered sheets ordered for a single casino project in 2021. For a ceramic wholesaler, it could be a specialized cordierite tube with a 50mm OD that only one client used—who has since changed vendors.
Once identified, you have several offload options:
Offer last-time buys to known users
Bundle into promotional pricing to move inventory
Repurpose into sample kits or demo stock
Sell off to secondary markets or recyclers
Write off and scrap, if unavoidable
The key is to have a clear threshold for action. For many distributors, the trigger point is 12 months of zero movement with no open quotes or leads.
Freeing up working capital has knock-on benefits:
More liquidity for faster-moving stock
Room to invest in high-demand SKUs (e.g., energy-efficient glazing or castable refractories)
Cleaner balance sheets and lower carrying costs
Stronger supplier terms due to focused volume
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Deadweight SKUs are silent killers of capital. For distributors in the glass, ceramics, and refractories space, trimming the fat from your catalog isn’t just an operational task—it’s a financial imperative. Free the capital, free the business.
