How to manage your initial stock levels

Once you've launched, your most important job is to watch what sells. Use your stock management or Point of Sale (POS) system every day to track which products are popular and which are not. This allows you to quickly reorder your bestsellers before they run out and avoid spending more money on items that aren't moving, protecting your cash flow and keeping your first customers satisfied.

Why getting stock levels right is crucial

Managing stock can feel like a balancing act. Order too much, and your cash is tied up in products sitting on a shelf. Order too little of a popular item, and you risk disappointing customers and losing sales. In these early days, your goal is to learn from real-world sales data what your customers truly want, so you can make smarter buying decisions going forward.

A simple guide to managing your first orders

You don't need a complex system to get started. Follow these key steps to stay in control:

1. Check your sales data daily: For the first few weeks, make it a habit to look at your sales reports at the end of each day. Which items sold? How many? Identifying your star products early on is a massive advantage.
2. Set a 'reorder point' for bestsellers: A reorder point is simply the minimum stock level you're willing to hold before ordering more. For example, you might decide that when you have only five units of your most popular product left, it's time to contact your supplier.
3. Know your supplier's lead time: How long does it take for new stock to arrive after you place an order? A week? A month? Your reorder point must give you enough cover to last for this "lead time". If an item takes two weeks to arrive and you sell five a week, you need to reorder when you have at least 10-15 units left to be safe.
4. Plan your reorders: Use the information you've gathered to plan your next purchase. You can now place a more informed order, perhaps increasing the quantity of popular items and reducing or discontinuing the ones that haven't sold.

Top tips for initial stock management

Look for trends, not blips: Don't place a huge reorder after one unexpectedly good day. Look for a consistent pattern of sales over a week or two before committing more cash.

First-In, First-Out (FIFO): Always aim to sell your oldest stock first. This is essential for perishable goods but is also good practice for products with packaging that might change or items that could go out of fashion.

Listen to feedback: Pay attention if customers ask for products you don't have. If you get several requests for the same thing, it could be a sign of a new product to add to your range.

Managing your stock is an ongoing cycle of tracking, ordering, and learning. By paying close attention right after your launch, you set your business up for a more stable and profitable future.