How do I manage stock and inventory for my small business?

Set up the basics

1. 1Give each product and each variant (size, colour) its own SKU code, and use the same code everywhere.
2. 2Do a full physical stock count to get a correct starting figure.
3. 3Record every movement in and out: purchases, sales, returns, samples, damage and transfers between locations.
4. 4Set a reorder level for each item based on how fast it sells and how long your supplier takes to deliver.
5. 5Count high-value or fast-moving items weekly and everything else monthly or quarterly, and investigate any difference.

When a spreadsheet stops being enough

• You sell in more than one place, such as a shop, an online store and a marketplace, and stock goes out of sync.
• You have hundreds of SKUs or many size and colour variants.
• More than one person updates the sheet and figures get overwritten.
• You regularly sell items you do not have, or find dead stock you forgot about.

Habits that keep stock accurate

• Label shelves and bins with SKU codes so items are easy to find and count.
• Use first-in, first-out for items that age, expire or go out of fashion.
• Review slow-moving stock every month and clear it with offers before it ties up more cash.
• Keep supplier details, lead times and minimum order quantities alongside each item.

Where technology helps

Inventory or POS software with barcode scanning removes most manual entry: scan to receive stock, scan to sell. When it connects to your online store, a sale in the shop reduces online stock immediately and vice versa. Low-stock alerts, automatic purchase order drafts and simple reports on best and worst sellers then help you decide what to reorder. Shopify, for example, can manage stock across a shop POS and online store in one place.