What does obsolete mean in FMCG?

This is inventory that is difficult or economically unjustified to sell through the standard channel.

Does an obsolete have to have a short date?

No. It may also result from changes in packaging, delisting, seasonality, or discontinuation of production.

When to start alternative selling?

Before a critical date or cost is reached, when the regular channel does not provide a reliable inventory disposal plan.

What data is needed for evaluation?

SKU, volume, dates, location, status, stock reason, and information about allowed and excluded channels and markets.

FMCG Obsoletes: How to Recover Value from Obsolete Stock?

Obsolete stocks are inventory items whose sale through regular channels is limited or no longer feasible. They may arise following delisting, packaging changes, overproduction, or a drop in demand.

Why are obsoletes created?

It is estimated that so-called obsoletes constitute on average from 3% to 10% of the sales value in FMCG companies, depending on the product category.

There are many reasons for the formation of obsoletes, and the most popular include:

Comprehensiveness is related to the breadth of the product range and the many different variants/flavors. This may be the result of market demand (consumer comprehensiveness) or the retail chain's desire for an exclusive offer (customer comprehensiveness).
Differences in the time horizon between production (lead time) and customer promotion planning. On the one hand, reducing production costs typically extends lead time. On the other hand, market unpredictability shortens the promotion planning horizon (the days of the annual promotion plan included in the JBP are long gone).
Shortening product life cycles and the pressure to introduce new products, fueled by the intense competitiveness of FMCG, make the product range resemble a snake that periodically sheds its old skin to make room for a new one.

See what comprehensive management of FMCG surpluses and obsoletes can look like.

Submit stock data for initial analysis

How to qualify stock?

Surplus, short-lived products, discontinued variants, and repackaging generate write-offs, take up space, and involve multiple teams.

The OTP organizes controlled sales to a dispersed base of small B2B customers. The manufacturer maintains agreed-upon limits, while the OTP handles customer acquisition, orders, payments, and logistics.

OTP Model

At OTP, we provide full outsourcing of obsolete management. We reach a dispersed database of smaller customers, aggregate orders and payments, and handle logistics.

We control the process and minimize your involvement in inventory leftovers, so you can focus on your core business: brand building, sales, and logistics.

Also learn how to plan for brand protection when selling surplus and obsolete items .