How do I spot dead stock in a toy store’s back room?

Toys age quickly. A product tied to a film, a craze or a season can go from hot to unwanted in months. The back room is where those goods collect, so ask to spend real time there with the seller and a notebook.

Look at the boxes. Dust, sun fading, dents, torn windows and yellowed plastic all say the item has been sitting. Notice what is missing from the shelves but heavy in storage, and note anything with missing parts. Take photographs of what you find, with the seller’s permission, so you can compare them to the records later.

Then check the paperwork. Ask for a stock listing with receiving dates and last-sold dates, and match it to what you saw. If the count in the books is much larger than the useful stock in the room, ask your accountant what that means for earnings. Ask whether suppliers took returns, and whether the owner has tried clearance sales or bundles. Agree early how stock will be counted at closing and how dead stock will be treated, because it should not be priced as if it were fresh.

Key takeaways

• Spend time in the back room with the seller and a notebook.
• Look for goods tied to old films, fads and seasons.
• Match what you see to receiving and last-sold dates.
• Agree how stock will be counted and how dead stock is treated.