How to choose a stock management system

Your first step is to choose a reliable method for tracking your stock. For a new business with only a handful of products, a simple spreadsheet is the perfect way to start. As your sales grow or you begin to sell across different places (like your own website and a pop-up shop), you’ll need to move to a system that automatically updates your stock levels whenever you make a sale.

Why is this so important?

Good stock management is the backbone of any product-based business. It helps you:

• Avoid overselling: It prevents the nightmare of selling an item you don’t actually have in stock, which leads to unhappy customers and refunds.
• Understand your bestsellers: By tracking what sells, you know which products are popular and what you should reorder.
• Reorder at the right time: It tells you when stock is running low so you can order more before you run out completely.
• Keep your accounts accurate: Knowing the value of your stock is essential for accurate financial records and calculating your profit.

What are your main options?

There are three main levels of stock management systems to consider, each suited to a different stage of business growth.

1. The Simple Spreadsheet
   This is the most basic method, perfect for when you're just starting out. Create a simple table with columns for a product code (SKU), product name, cost price, and current stock level. You then have to manually update the quantity every time you make a sale or receive a delivery.
   Best for: New businesses with fewer than 50 unique products and one sales channel.
2. Built-in E-commerce Tools
   If you sell through an online platform like Shopify, Squarespace, or Etsy, they have their own built-in inventory tracking. When an item sells through the platform, it automatically reduces the stock count for you.
   Best for: Businesses that primarily sell through one single online store.
3. Dedicated Inventory Software
   This is the most powerful option for a growing business. Tools like Katana, Cin7, or Veeqo are designed to connect all your sales channels (e.g., your website, Etsy, a physical shop till) into one central system. When a product sells anywhere, the stock level is updated everywhere else automatically.
   Best for: Businesses selling across multiple channels or those with complex stock needs, like products made from multiple components.

How to choose the right system for you

Ask yourself these key questions to decide what you need right now:

• How many products do I have? If it's under 50, a spreadsheet is manageable. If it's hundreds, you need software.
• Where do I sell? If you only sell on one website, its built-in tools are a great start. If you sell on your website, on eBay, and at markets, you need dedicated software to sync them all.
• What's my budget? Spreadsheets are free. Built-in tools are usually included in your e-commerce platform fee. Dedicated software is an extra monthly cost, often starting around £30-£80 per month.

Top Tip: Don't overcomplicate it. The best system is one you will actually use consistently. Start with the simplest method that meets your current needs and have a plan to upgrade as your business grows. Accuracy is more important than having lots of fancy features you don't use.