Damaged, Missing or Written Off: Who Carries a Loss on Stock Held in a China Warehouse

Stock stops existing in four ways, and sellers usually discover only the last one. A unit is damaged, a unit is missing, a unit is written off after a hold, or a unit was never what the paperwork said it was. Each has a different owner, a different paper trail, and a different chance of being recovered. A 3PL fulfillment relationship goes badly wrong when the four get lumped into one line on a monthly report.

Damage at goods-in is a conversation with your supplier

A carton that arrives crushed has a cause outside the building, and the record that matters is the one taken before it is put away. We photograph exceptions on arrival rather than every carton, and a seller who wants the full count documented should ask for it as a service rather than assume it happens. Once a damaged unit is accepted into a rack, the distinction between your supplier's fault and our handling starts to blur, and blurred means unbilled to nobody, which is the worst outcome for both sides.

Damage in storage is ours, and it is usually a shelf problem

Crushed tops, a carton dropped in an aisle, water at a loading door: storage damage is small, constant and recoverable if it is booked the day it happens. We book it as a shrinkage line and count it into the next cycle count, because a loss that is not booked becomes a discrepancy that cannot be explained later. Compensation is based on declared value, so the figure you put on the paperwork is the ceiling on what any claim can return — a point worth making before someone's cheap habit costs them a real claim. Our declaration page covers how that figure reaches the documents at all.

Missing units are almost always a counting failure before they are a theft story

Two bins, one SKU value, and a picker who read the wrong line will produce a phantom loss that looks identical to a theft on a report. This is why the reconciliation that matters is three-way: what your store paid for, what we dispatched, and what the count sheet says is left. Our discrepancy article walks the evidence chain, and the inspection and returns page covers what happens to a unit that turns up late.

Written-off stock is a decision somebody has to make out loud

A hold that nobody resolves, a batch past a use-by date, or a semi-sensitive line the channel will not carry after a re-audit becomes a write-off eventually. The costs are not just the goods: storage accrues while the decision waits, and a pallet of unsellable stock is a rental fee with no revenue attached. Write-offs need your instruction, because we do not destroy or dispose of goods you own on our own initiative, and we will keep raising the same question until it is answered. Regulated goods sit in the same queue for a different reason — they are subject to channel confirmation, so treat a hold as an open question rather than a lane that will eventually say yes.

What the monthly report should contain

Four separate lines, not one: received short, damaged in our custody, unresolved discrepancy, and written off with your approval. Add the count date and the bin, so a discrepancy can be traced to a shift instead of to a mood. If a provider shows you one number labeled adjustments, ask for the breakdown before you scale; the request is normal and the refusal is informative.

The limits of what any warehouse can promise

We cannot insure a defect your supplier shipped inside a sealed carton, and we cannot recover a value above what was declared. What we can do is book every loss the day we see it, keep the evidence for the claim window, and tell you about the write-off while it is still a decision instead of a surprise. A relationship that handles losses in that order is one whose numbers you can plan with, and that is worth more than a zero on a report that has never been audited. Fulfillment services that cannot name an owner for each of those four lines will still send you a monthly total; the total simply is not evidence.

Questions this desk gets asked

Does a warehouse count stock continuously?

No. Physical counts happen at goods-in and on a cycle schedule; between them the system tracks movements. That gap is why a discrepancy needs a count date and a bin to be useful.

Who pays for storage on stock awaiting a write-off decision?

The owner of the stock, which is usually the seller. That is the incentive to answer the question early; we raise it and keep raising it, but the decision is not ours to make.

Can a lost unit be recovered after a claim window closes?

Sometimes the unit, rarely the claim. Physical stock turns up; a recovery against an insurer or a carrier past its deadline almost never does.

By Tony Zhang, FulfillDock by SBT. Written from the goods-in desk's own loss categories, the ones we have to book whether or not a customer ever notices. Published 23 October 2026, last checked 23 October 2026