Damaged, expired and unsold stock: how to stop it eating your margin

Nobody loses a lakh of stock in one day. It goes a few pieces at a time: a crate dropped at loading, a carton the rats found, a case of juice that sat at the back until it expired. None of it is written down, so it turns up at the year-end count as “stock difference”, too late to do anything about.

The fix is not a bigger godown or a stricter manager. It is making the loss visible every day, so it can be managed like any other cost.

Where the loss really comes from

• The godown: handling, leaks, rats, damp.
• The van: breakage on bad roads and hurried loading.
• The shops: expired or damaged goods you accept back.
• Over-ordering: stock that sits until it expires. This is often the biggest one, and the easiest to prevent.

Six habits that keep it small

1. Write off every piece, with a reason

When something breaks or expires, record it the same day: which product, how many, and why. Value it at what it cost you, not at the selling price. Once it is a number in the day’s profit, you can see which van, route or product keeps producing it.

2. Earliest expiry to the front

When new stock arrives, put it behind the old, and load vans from the front. This is called “first expiry, first out”, and it is the single cheapest way to cut expiry loss.

3. Write the expiry date down when goods arrive

For anything that expires (milk, curd, bread, juice, snacks), note the expiry date on the purchase entry. Not for soap or matchboxes; there is no point watching goods that do not expire. A date written down on arrival is what lets you be warned before it passes.

4. Don’t hold more than you can sell before the date

A simple rule: never hold more than a few weeks of sales of anything with a short shelf life. If a product sells 20 cases a week and lasts 8 weeks, holding 80 cases is already the limit, because the last case in must still sell in time. If the company pushes more, read when the company sends more stock than you can sell.

5. Have a clear rule for returns from shops

Decide what you take back and when. For example: expired goods only in exchange for a fresh order, and near-expiry goods only if you can still sell them elsewhere. Write every return down on the day it comes back. If your company gives damage or expiry claims, your records are what you claim with.

6. Ten minutes a week on what is close to expiry

Once a week, look at everything expiring in the next month. Load it on the busiest routes, add it to a scheme, or ask the supplier about a return while there is still time. Stock that is slow for other reasons is covered in finding the stock that is stuck.

How Mulberry Sales helps

Unsold goods come back into stock when a van unloads, and damaged or expired goods are written off at what they cost you, so the loss shows in the day’s profit (Growth plan and up). You can add an optional expiry date on each purchase bill line. Stock alerts then warn you before those goods expire and flag anything past its date, with how much is still on hand (Business plan). That on-hand figure is an estimate that assumes the oldest stock leaves first; salesmen do not pick batches, so billing stays fast. Goods entered without a date are never reminded about. See van sales software.