The Challenge
A leading baby products D2C brand had built an impressive catalog of over 800 products—from clothing and accessories to nursery essentials and feeding products. Their growth had been meteoric, expanding from a single product line to a full baby lifestyle brand in just three years. But this rapid expansion came with a hidden cost that was slowly eating away at their profitability.
The challenge with baby products is unique: sizes change every few months as babies grow, seasons matter for clothing and accessories, and trends in nursery decor shift quickly. What sells brilliantly in newborn sizes may sit untouched in 18-month sizes. A winter-themed sleep suit is worthless by spring. These dynamics created perfect conditions for dead stock to accumulate silently.
The brand's inventory was spread across three warehouses—their primary fulfillment center, a marketplace-managed warehouse, and a returns processing facility. Each had its own inventory system, and there was no unified view of aging stock across locations. The finance team knew they had an inventory problem—their balance sheet showed ₹1.3 crore in inventory value—but they couldn't identify which specific products needed attention.
Complicating matters, the brand's success with bundled products (onesie sets, gift hampers, nursery collections) meant that individual SKUs could be sold standalone or as bundle components. Without proper tracking, it was impossible to know which approach would move aging inventory faster.
The Discovery
TrueLens conducted a comprehensive inventory aging analysis across all three warehouse locations, mapping every SKU to its last sale date, current demand velocity, and remaining sellable window based on size/season constraints.
The findings revealed the true scale of the problem:
Dead Stock Breakdown
- Size curve mismatches (₹48L): Newborn and 0-3 month sizes were constantly selling out, while 12-18 month sizes in the same designs sat untouched. Production had been uniform across sizes without regard to demand patterns.
- Seasonal carryover (₹28L): Winter collection items from the previous year, now nearly worthless as the season approached again with new designs launching.
- Discontinued designs (₹22L): Products from collaborations and limited collections that were never properly marked down or liquidated.
- Returns trapped in processing (₹14L): Items sitting in the returns facility, already inspected and ready for resale, but never moved back into sellable inventory.
Perhaps most striking was the discovery of bundling opportunities. Analysis showed that 340 slow-moving SKUs could be paired with fast-moving items to create attractive bundles. For example, unpopular standalone receiving blankets moved quickly when bundled with bestselling onesie sets at a slight discount.
The returns processing facility was particularly problematic. We found over 2,800 units that had been inspected, approved for resale, and then essentially forgotten. These items were aging in a facility that charged monthly storage fees while being completely invisible to the sales and inventory teams.
The Solution
We developed a strategic liquidation program with multiple channels and approaches based on product condition, age, and remaining value:
- Tiered pricing strategy: Products were categorized by age and condition, with systematic price reductions. 60-90 day items got 20% off, 90-120 days 35% off, and 120+ days moved to liquidation at 50%+ discount.
- Strategic bundling program: Created 85 new bundles pairing slow movers with bestsellers, marketed as "value sets" rather than clearance items to protect brand perception.
- Flash sale calendar: Scheduled monthly flash sales targeting specific dead stock categories, timed to coincide with size transition periods when parents are stocking up on larger sizes.
- B2B liquidation channel: Established relationships with baby specialty stores and hospital gift shops for bulk liquidation of older inventory at wholesale prices.
- Returns reintegration: Implemented a weekly process to move approved returns back to primary warehouse within 48 hours of inspection completion.
- Size curve optimization: Redesigned production planning to weight sizes based on actual demand velocity, reducing future dead stock creation at the source.
The Results
The strategic liquidation program exceeded expectations:
The recovery rate of 70% was significantly higher than the industry standard of 40-50% for baby product liquidation. This was achieved by moving quickly—before seasonal items became completely unsellable—and by leveraging bundling to sell slow movers alongside desirable products rather than marking them down as standalone clearance items.
The ongoing impact is equally significant. With proper size curve planning, the brand has reduced dead stock creation by 45% for new product launches. The returns reintegration process now recovers an additional ₹8-10 lakh monthly in previously "lost" inventory.
The brand now runs a monthly "inventory health check" that flags aging products before they become problematic, allowing proactive intervention rather than reactive liquidation.
"We thought our inventory was an asset. TrueLens showed us that a significant portion was actually a liability losing value every month. The recovery program didn't just recoup cash—it changed how we think about inventory management."
— Head of Operations, Baby Products D2C Brand
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