How do I check a flooring store’s dead stock and discontinued lines?

Match the count to the shelves. Pick a sample of items from the list and find them in the warehouse, then pick items off the shelves and find them on the list. Mismatches either way deserve a conversation.

Ask the owner for the sales history of the slowest items. Discontinued lines are a particular problem in flooring, because matching a dye lot or pattern later can be impossible. A leftover lot can be useful for repairs, but a pallet nobody orders is a cost.

Ask whether the supplier takes returns, runs clearance programs or will swap lines. Find out how long odd lots have been sitting, and whether the owner has ever written anything down. Agree on a separate treatment for old stock in the deal, such as excluding it or pricing it apart. Your accountant can advise how that should appear in the numbers. Think about what a realistic exit for old stock looks like. Some can go to contractors who want cheap material for rentals, some can be sold at a discount on the showroom floor, and some may only be fit for disposal. Ask the owner what has worked before, and be honest about how long it would take you to clear it. If stock is large, the deal should say who takes the loss when it does not sell.

Key takeaways

• Test the inventory list against the shelves in both directions.
• Separate fast sellers from discontinued or stale lines.
• Ask whether suppliers take returns or swap old lines.