For small businesses handling physical products
Inventory Setup & Organization
- Categorize inventory: Group items by type, SKU, or demand (e.g., fast vs. slow-moving).
- Choose a storage system: Shelving, bins, or digital labels for easy access.
- Assign locations: Label shelves/bins to track where items are stored.
Tracking & Documentation
- Select a tracking method:
- Manual: Spreadsheets (Excel/Google Sheets) for low-volume.
- Digital: Inventory software (e.g., QuickBooks, Zoho Inventory, TradeGecko).
- Record details: Item names, SKUs, quantities, costs, and reorder thresholds.
- Barcode/QR systems: Implement if scaling up (scanners + apps like Shopify POS).
Stock Control
- Set par levels: Minimum stock quantity before reordering.
- First In, First Out (FIFO): Rotate stock to avoid expired/obsolete items.
- Audit regularly: Schedule weekly/monthly physical counts to match records.
Order Management
- Supplier list: Contact info, lead times, and MOQs (Minimum Order Quantities).
- Reorder process: Automate alerts when stock hits par levels.
- Backup suppliers: Identify alternatives to avoid shortages.
Demand Forecasting
- Analyze sales trends: Use past data to predict busy/slow seasons.
- Adjust for promotions/events: Plan stock increases for holidays or marketing campaigns.
Loss Prevention
- Security measures: Cameras, locked storage, or anti-theft tags (if high-value).
- Track shrinkage: Log damaged, stolen, or expired items to identify issues.
Efficiency & Optimization
- Reduce dead stock: Discount/sell stale inventory to free up space/cash.
- Bundle slow movers: Pair with popular items to clear inventory.
- Dropshipping option: For low-demand items, avoid stocking them yourself.
Technology & Tools
- Integrate systems: Sync inventory software with POS/sales channels (e.g., Amazon, Shopify).
- Mobile access: Use apps to manage stock on the go (e.g., Sortly, inFlow).
Continuous Improvement
- Review turnover rates: Identify which items sell fastest/slowest.
- Solicit team feedback: Employees may spot inefficiencies in storage/picking.
Bonus Tips
- Start simple: Use free tools like Google Sheets templates or Square POS for basics.
- Label everything: Save time with clear product names/locations.
- Audit seasonally: Align with tax or fiscal year-end for accurate reporting.