What To Do With SLOB Inventory: 7 Smart Strategies to Turn Dead Stock Into Cash

A quiet aisle full of forgotten stock: a reminder that slow and obsolete inventory silently ties up cash, space, and opportunity until a strategy brings it back to life.

Every manufacturer has it.
That shelf in the back room. That corner of the warehouse. The products that haven’t moved in months (maybe years).

Slow-moving and obsolete inventory (commonly called SLOB inventory) quietly eats up working capital, warehouse space, and management attention. What once looked like a profitable asset has now turned into a silent drain on your balance sheet.

But here’s the good news: SLOB inventory doesn’t have to be a total loss. With the right strategy, you can convert dead stock into real value: cash, goodwill, or even tax advantages.

Below are seven practical ways to turn your SLOB inventory from a problem into an opportunity.

1. Sell It Fast: The Fire Sale Option

Sometimes, speed beats margin.
If your primary goal is to recover cash quickly and free up space, a fire sale can be the fastest solution.

Offer aggressive discounts to liquidators, distributors, or even directly to customers. List products on secondary marketplaces like eBay, Alibaba, or specialized B2B surplus sites. The point isn’t to maximize price; it’s to recover dollars and reclaim storage.

Just be strategic: communicate that the sale is for a limited time or limited quantity to protect your core pricing structure. You can even segment the offer to specific customers or geographies to avoid damaging your main market.

2. Bundle It With High-Margin Products

Another smart play is to turn dead stock into an incentive. Pair your slow-moving items with your high-margin or high-volume products.

Example:
If you sell industrial filters and have excess of an older model, include one free with each purchase of the new generation. Customers perceive more value, and you reduce the SLOB quietly without lowering your primary product’s price.

Bundling can also increase the average order size and deepen customer loyalty (both of which improve your overall profitability).

3. Offer It as a Client Gift or Loyalty Bonus

SLOB inventory can also be a relationship-building tool.

Instead of writing off the stock or dumping it, give it away to clients as part of a customer appreciation campaign or loyalty bonus. The cost to you is minimal, but the goodwill impact can be substantial.

You can position it as a “value-add” or a “thank you for your partnership,” an easy way to make your clients feel appreciated while clearing warehouse space.

And in some cases, these gestures can even revive dormant accounts or spark new orders for related products.

4. Donate It and Take the Tax Deduction

Many manufacturers overlook one of the most financially beneficial options: charitable donation.

If your SLOB inventory still has functional or resale value, you can donate it to a qualifying nonprofit organization, school, or trade program. This not only supports your community but also allows you to claim a tax deduction for the fair market value of the goods.

Key tip: work with your CFO or tax advisor to ensure the donation is properly documented and eligible under IRS rules. With the right structure, your “dead stock” can become a meaningful write-off that offsets real tax liability.

5. Repurpose or Rework the Materials

In some cases, the best solution isn’t selling or donating.

It’s transforming.

Many manufacturers successfully rework obsolete products into components or raw materials for new lines. For example, outdated assemblies can be stripped for parts, or materials can be reused in prototypes, training, or R&D testing.

This approach not only reduces waste but can lower future purchasing costs. The key is to evaluate whether the rework cost is lower than replacement cost. If it is, you’re creating instant operational savings.

6. Offer It to Employees

Employee giveaways or discounted sales can be another effective way to move SLOB inventory (especially for consumer-facing goods or branded merchandise).

This can serve as a low-cost morale boost, particularly during slower periods or around holidays. In manufacturing environments where team pride runs deep, offering employees access to excess inventory at deep discounts can both strengthen culture and clear space.

Depending on the nature of the product, you may also explore employee auctions or internal reward programs that use SLOB inventory as incentives.

7. Write It Off Strategically (and Use It to Improve Future Planning)

If none of the above options are viable, the final (and often necessary) step is to formally write off the inventory.

This doesn’t have to be bad news. A clean write-off not only clarifies your true financial position but also creates tax advantages and improves your inventory turnover ratios (both critical metrics for lenders and investors).

More importantly, it’s a data moment. By analyzing the causes of SLOB buildup (over-ordering, poor demand forecasting, engineering changes, or lack of lifecycle control) you can implement stronger procurement and planning systems.

A one-time write-off, if handled well, can be the start of a permanently leaner operation.

Turning SLOB Into Strategy

Most manufacturers think of SLOB inventory as an unavoidable headache. The truth is, it’s a symptom of deeper operational inefficiencies — and also a powerful opportunity to recover cash, build goodwill, and clean up your books.

Whether you fire-sell, bundle, donate, rework, or write off, the key is to act intentionally and quickly. Every month you hold SLOB inventory, you pay in storage, insurance, and lost liquidity.

At Summa Consulting, we help manufacturing companies turn these silent losses into measurable gains. Our team identifies the hidden value in your balance sheet, develops liquidation or repurposing strategies, and ensures your books reflect reality — not old stock sitting on shelves.

If your business carries slow or obsolete inventory, you’re sitting on untapped value. Let’s uncover it.

Book a free assessment today and see how much working capital is locked up in your warehouse.