Good article!
And you are 100% correct Ed.
The saying I learned years ago was "your first loss was your best lost".
The old saying is your first loss is you best loss. Something you learn in trading stocks very quick. Same rules apply.
Google Your First Loss Is You Best Loss. Lot of stuff out there on the theory.
Basically the idea is that once it is considered undesirable inventory because it is not sell, get what you can for it as fast as you can so you can put that money into something that will sell.
This is also of element of what they refer to in retailing as "turns" or "inventory turn. You have to turn you investment every so often to really make your business (and investment) a viable one from an accounting point of view. Dead merchandise is a big deterrent to a good turns ratio.