How to implement a regular stocktake and ordering process

To effectively manage your products, you need to create a simple, regular schedule for counting what you have (a stocktake) and reordering what you need. This routine is the key to keeping your best-sellers in stock, preventing lost sales, and avoiding tying up your cash in products that aren't selling. Getting this right is fundamental to running a profitable retail or e-commerce business.

Why a regular stocktake is crucial

Without a clear picture of your inventory, you are essentially running your business blind. A consistent stock management process helps you:

• Maximise sales: By knowing exactly when to reorder your popular items, you ensure you never have to tell a customer, "Sorry, we're out of stock."
• Improve cash flow: It stops you from over-ordering slow-moving products that just sit on the shelf, tying up money you could be using elsewhere in the business.
• Reduce waste: For businesses with perishable goods or products with a use-by date, a stocktake process is essential for selling items before they expire.
• Identify problems: Regular counts can help you quickly spot issues like theft, damage, or supplier errors, saving you money in the long run.

How to Set Up Your Process in 4 Steps

Don't overcomplicate it. The best system is one you can stick to consistently.

1. Choose your method: For a small number of products, a simple clipboard and paper or a spreadsheet is perfectly fine. As you grow, you might use the inventory management features in your sales system (like Shopify or Square) or dedicated stock software. The tool is less important than the routine.
2. Schedule your counts: Consistency is everything. Decide on a frequency and put it in your calendar. For fast-moving, key products, a quick weekly count is a good idea. For slower-moving items, a full count once a month might be enough.
3. Do the count and analyse: This is the core of the task. Physically count the quantity of each product you have on hand. Compare this number to what your sales records suggest you should have. The difference is your sales number. Now, ask the important questions:
   • Which items are selling fast and are approaching their reorder level?
   • Which items have barely sold since the last count?
   • Are there any surprises or patterns, like a sudden interest in a particular product?
4. Place your orders: Armed with this data, you can now confidently place orders with your suppliers. You're no longer guessing; you're making an informed decision based on real sales data. Try to consolidate orders with the same supplier to save on delivery fees.

Best Practices

Set 'Reorder Levels': For each product, decide on the minimum stock level that should trigger a new order. For example, "When I have only 5 of these left, I need to order more." This simple rule takes the guesswork out of the process.

Embrace 'First-In, First-Out' (FIFO): Always organise your stock so that the oldest items are sold first. This is critical for food or items with an expiry date but is good practice for all products to keep your range fresh.

Analyse slow-movers: The goal isn't just to count. Use the data to take action. If a product hasn't sold for two months, consider putting it on sale to free up cash and space for a product that will sell better.