5 Questions to Help Decide Whether to Sell or Repurpose Dead Inventory

As an electronics components and connectors company, you likely have a lot of inventory sitting in your warehouses. Some of that inventory may be slow-moving or even considered "dead" - items that haven't sold in a long time and are unlikely to sell in the near future. 

When you have dead inventory, you have a decision to make - should you try to sell it off at a discount, or should you repurpose the components for something else? There's no one-size-fits-all answer, as it depends on the specific items and your company's situation. However, asking yourself these 5 key questions can help guide your decision:

1. What is the current market value of the inventory?

The first thing to consider is how much you could realistically sell the dead inventory for in its current state. Look at recent sales of similar items, both new and used, to get a sense of the market value. 

If the items are still in good condition and have some useful life left, you may be able to sell them to other companies or individuals who can use them. However, if they are obsolete, damaged, or have very little value left, it may not be worth the effort to try to sell them.

2. What are the costs to sell the inventory?

In addition to the current market value, you need to factor in the costs associated with selling the inventory. This includes things like:

- Storage and handling costs while the items are in your warehouse

- Fees for listing the items for sale online or at auction

- Shipping and packaging costs if you need to send the items to the buyer

- Time spent by your staff to process the sales

If the costs to sell the inventory are higher than the potential revenue, it may not be worth pursuing. In that case, repurposing or recycling the components may be a better option.

 3. Is there a way to repurpose the components?

Rather than selling the dead inventory as-is, you may be able to repurpose the components for something else. This could involve:

- Stripping the components out of the original products and using them to repair or refurbish other items

- Melting down metal components to recycle the raw materials

- Selling the components to other companies who can use them in their own products or projects

Repurposing the components can help you extract more value from the inventory and avoid the costs of trying to sell it. However, it does require additional time and effort on your part.

4. What is the cost to repurpose the components?

If you decide to repurpose the components, you need to factor in the costs associated with that process. This includes:

- Labor costs for your staff to disassemble the products and extract the components

- Equipment and supplies needed for repurposing, such as tools, chemicals, or packaging

- Storage and handling costs for the repurposed components

- Costs to dispose of any waste or unusable materials

Make sure the potential value you can get from the repurposed components exceeds the costs to process them. Otherwise, it may not be worth the effort.

5. What is the opportunity cost of keeping the inventory?

Finally, consider the opportunity cost of keeping the dead inventory in your warehouse. That space could potentially be used to store faster-moving, more profitable items instead. And the money tied up in the dead inventory could be invested elsewhere in the business.

If the dead inventory is taking up a significant amount of space and capital, it may be worth selling or repurposing it, even at a loss, in order to free up those resources for more productive uses.