Dead Stock Hold vs Liquidate Calculator for Prophet 21 Distributors
Most distributors carry a layer of stock that has not sold in a year and may never sell. This calculator compares the real cost of keeping it against selling it down now, using your carrying cost rate and two recovery assumptions.
Your numbers
Cost value of items with no sales in your cutoff window, from your slow mover or no-sale report.
Capital, storage, insurance, shrink and handling as a percent of inventory cost per year.
What you realistically expect to recover over time through normal sales or a later sale.
Broker, auction, return-to-vendor or bulk-sale proceeds as a percent of cost.
Your results
Planning estimate. Tax effects of write-offs and donations are not included. Confirm with your controller.
Total loss by holding period
Sweeps Months you expect to hold from 0 to 60, holding your other inputs fixed.
Dead stock report from your ERP data
Optional: we can show how last-sale and on-hand data could build this list automatically, read-only.
Optional. The tool and every export work without this. No spam.
How to use it
Pull the cost value of your dead stock from your no-sale or slow mover report in Prophet 21 (or any ERP), then enter your annual carrying cost rate. Enter two recovery percentages: what you expect to get back if you keep the stock and sell it slowly, and what a liquidation buyer or vendor return would pay today. Slide the holding period to see how the gap changes. The chart shows both losses over time so the crossover is visible.
- Use cost, not selling price, for every value.
- Run it by vendor or product group, since recovery rates differ widely.
- Treat the hold recovery as a probability weighted figure, not a hope.
The math behind it
Loss if held equals value times (1 minus hold recovery) plus value times carry rate times months over 12. Loss if liquidated equals value times (1 minus liquidation recovery). Setting them equal gives the break-even: months = (hold recovery minus liquidation recovery) divided by carry rate, times 12. With 55 percent hold recovery, 35 percent liquidation recovery and a 22 percent carry rate, the break-even is about 11 months. Hold longer than that and liquidating wins.
Reading the result
If your honest holding period exceeds the break-even, the calculator is telling you the stock is costing more to keep than it will ever earn. The advantage figure is the cash value of acting now. Remember the opportunity side: freed cash and warehouse space can fund fast movers, which this model does not credit.
Common mistakes
Teams overestimate hold recovery because they remember a single lucky sale. Another error is ignoring that dead stock tends to be written down eventually, which converts the loss into a tax and reporting event anyway. Finally, do not mix serialized, lot-controlled or hazardous items into the same pool as ordinary catalog goods, since their disposal costs differ.
Frequently Asked Questions
What carrying cost rate should I use?
Many distributors land between 18 and 30 percent annually once capital cost, space, insurance, taxes, shrink and handling are included. Use your finance team's cost of capital plus a measured storage and handling figure rather than a default.
Does this include tax write-off benefits?
No. Write-downs and donations can change the after-tax picture, and rules vary by country and entity. Use the pre-tax result to rank options, then have your controller model the tax effect.
How do I find dead stock in Prophet 21?
Use your inventory reports or a custom query filtered by last sale date and on-hand quantity, then total the cost value. The exact report name varies by configuration, so check with your P21 administrator.
Should I always liquidate?
No. If the break-even is longer than the time you realistically need, or the item has contractual demand coming, holding can win. The tool shows the crossover so the decision is explicit.
If you want dead stock lists, last-sale dates and vendor return eligibility pulled straight from your ERP data instead of exported by hand, Netray can set that up read-only.
Related Tools
Distributor GMROI and Inventory Turns Calculator
Calculate GMROI, inventory turns and days of inventory for a branch, vendor line or product group, and see how inventory levels move the return.
Supply Chain & InventoryEOQ with Vendor Minimum Order Calculator
Find the economic order quantity, then see what a vendor minimum order quantity costs you per year and how many days of stock it forces.
Supply Chain & InventoryEclipse Branch Stockout Lost Sales Calculator
Estimate what stockout days cost at a branch in lost margin and inter-branch transfer expense, and test how improving availability changes the number.
Discrete ManufacturingInventory Carrying Cost Calculator
Build your true annual carrying cost from capital, storage, insurance, and obsolescence components - and see what an inventory reduction target is worth.
More Epicor tools
See all- Prophet 21 Inventory Replenishment Calculator
- Prophet 21 Pricing Library Design Worksheet
- Prophet 21 Upgrade Checklist
- Prophet 21 Data Cleanup Checklist
- Prophet 21 Special Order Request Form Template
- Prophet 21 Vendor Return Authorization Request Template
- P21 Price Matrix Multiplier and Margin Calculator
- Prophet 21 Inventory by Location SQL Generator
- Prophet 21 Open Order and Backorder SQL Generator