Sunk cost should not control the next decision
The original product cost matters for reporting, but the exit decision should compare future cash outcomes from today. Holding inventory longer can preserve the hope of full price while adding storage, opportunity cost, and obsolescence risk.
Model each available path
- Hold: expected full-price contribution minus future storage and demand risk.
- Discount: lower margin per order plus promotion and advertising costs, adjusted for faster sell-through.
- Remove: removal and external storage cost plus the expected resale value elsewhere.
- Liquidate or dispose: expected recovery or cost after current marketplace charges.
Set decision dates before urgency arrives
Create inventory-age checkpoints and a required action at each one. An early modest discount can recover more cash than a late aggressive clearance after additional storage and weaker demand.
Feed the outcome back into purchasing
Record why the inventory aged: forecast error, high minimum order quantity, listing weakness, seasonality, quality, or price. Use the cause to change reorder rules and supplier terms so the exit process improves future buying.