Inventory management for online businesses: how to track stock without losing money
To manage inventory for an online business: give every product and variant its own record, deduct stock on every sale in every channel, count physical stock on a schedule, set a reorder level for each item and review slow-moving items monthly.
Why online sellers lose money on stock
When you sell on WhatsApp, Instagram and a storefront at the same time, the same item can be sold twice, stock can run out unnoticed and money gets tied up in items that do not move. Most of it comes from keeping stock in your head or in scattered chats.
1. One record per product, and per variant
A shirt in three sizes and two colours is six items to track, not one. Record each variant with its own quantity and price so you know exactly which size is selling and which is sitting.
2. Deduct stock on every sale
Update stock at the moment of sale, whatever the channel. The longer you wait to update, the more likely you are to promise something you no longer have.
3. Set a reorder level
For each item, decide the quantity at which you must reorder, based on how fast it sells and how long restocking takes.
If you sell | And restocking takes | Reorder level is about |
|---|---|---|
5 a week | 2 weeks | 10 plus a small buffer |
20 a week | 1 week | 20 plus a small buffer |
4. Count physical stock regularly
Count your stock on a schedule, weekly for fast sellers and monthly for the rest, and compare it with your records. Differences point to theft, damage, unrecorded sales or wrong entries.
5. Watch what is not moving
Stock that sits is cash you cannot use. Each month, list the items that did not sell and decide whether to discount, bundle or stop buying them.
6. Track more than one branch or kitchen separately
If you have more than one location, track stock per location. Otherwise one branch can run out while another has plenty.
Common questions
Can I use a spreadsheet? Yes at the start, but it breaks down as sales, channels and staff increase because entries are manual and easy to forget.
What should I track first? Quantity on hand, cost price and selling price for each item.