How to manage your inventory without the headache

Inventory is money stored as products. If you do not control it, two bad things happen: you sell something you no longer have (and let the customer down) or you pile up products that do not move and tie up your capital. Good control avoids both.

1. Record everything in and out

The basis of control is simple: every time you buy stock, add; every time you sell, subtract. If you record your sales on the spot, your inventory stays updated by itself and you always know what is available.

2. Identify your star and slow products

Not all your products sell the same. Some fly off the shelf and others sit there. Review your sales to know which are your stars (always restock) and which are slow (do not buy more and consider a promotion to clear them).

3. Set a reorder point

1. Calculate how many units of a product you sell per week.
2. Add how many days your supplier takes to deliver.
3. When stock reaches that level, order before you hit zero.

4. Do a physical count now and then

Even if you keep everything digital, it is worth physically counting your inventory periodically and comparing it with your records. Differences reveal losses, errors or theft you would not otherwise see. Do it at least once a month with your most valuable products.