What is dead stock?
Dead stock is stock without (enough) sales. How long 'long' is differs per store: for fashion a season is already long, for spare parts perhaps a year. Agree on a threshold, for example no sales in 90 days.
Why it matters
Dead stock does not show up as a cost in your profit and loss statement, but the money is gone until you sell. The sooner you see it, the more options you have: mark it down, bundle it, try another channel, or stop reordering.