Torchlight flashes off the floor. A dank and musty smell overpowers my nostrils as I tiptoe forward in trepidation. Something grazes the side of my head. I pause briefly to take a deep breath and convince myself it was only a cobweb. Just a harmless cobweb like the ones I can see dangling across my path ahead. It’s been a while since anyone has been down here.
Now the torch catches something else. A false wall. That’s great because nothing bad is ever hidden behind a false wall at the end of a creepy corridor, right? I peer around the wall. And that’s when I see them in the shadows.
Eerie, lifeless figures. Too many to count. Suspended in limp resignation to their fate. I brace myself and point my torch directly at them…
A rail of clothes from three seasons ago. Tucked out of sight for safekeeping, concealed by the new false wall, and completely covered in dust. The joys of working in retail.
Please benefit from my vaguely traumatic experiences by:
It’s the second one I’m focusing on in this article. We’ll take a look at:
That tale came from my time in brick-and-mortar retail. I began working in a department store at the age of 16. Not long after starting, I was told I was moving to work in “loss prevention”. Whether I was offending the customers or just looked like I’d got a bright future in inventory management ahead of me, I’m not sure.
So, this inexperienced teenager was entrusted with keeping tabs on inventory and making sure things weren’t going missing. Except I wasn’t actually given a stock list to compare with the current inventory levels. And then they seemed surprised when I was over the 10% shrinkage limit.
Formative experiences for young Stephen. And it just goes to show that you never know when things you pick up in your first job will come in handy. Now I’m responsible for inventory levels for my store, you can bet there’s an inventory checklist and a stock list to work from.
There’s lots of inventory management software available to help with the practicalities of checking inventory. I’ll mention some of the tech I’m using later. But here I’m really thinking about a philosophical approach to inventory. How should you be approaching this problem facing your ecommerce business?
Having dealt with inventory problems as a lowly entry-level employee, a supervisor, and a manager, my overriding take on inventory management is that it’s about having the right product in the right place at the right time. That’s the golden rule.
This is the tension at the heart of good inventory management. You need to simultaneously treat your inventory as assets that are going to make you money and liabilities that are going to cause you problems.
As soon as you purchase your stock, it holds liabilities. Damage during shipping, theft, and being stashed behind false walls are just some of the threats to your inventory. Your inventory is a bit like a friend you can never fully trust.
Even my old retail job had accepted that 10% shrinkage was inevitable. I’d say strive for perfection, but prepare for the worst. Expect inventory losses and, more than that, factor them into your pricing strategies.
How do you go about putting some of those considerations into action? Here’s my inventory checklist of all the things you need.
I mentioned in my ecommerce barcoding post that I’m using Stocky. This is an app that integrates with Shopify, so you can use barcode scanners to monitor inventory. It’s too early to give you the full product review, so watch this space. But tech is undoubtedly the easiest way to follow my golden rule: right product, right place, right time.
Finding your warehouse is another topic I’ve covered previously. Happy workers, tidy spaces, and a clear system in place are all good indications that a warehouse will not send your shrinkage rate through the roof.
It’s a long journey from manufacturer to warehouse. Study your Incoterms to understand at which point in the journey you have liability for your inventory.
Make sure you have appropriate insurance for the stages when you have liability for your inventory. You don’t want an entire shipment wiped out because the delivery driver left it in the rain outside the warehouse.
Just don’t. And make sure nobody at your warehouse signs for them either. Yes, the delivery person will hate you. Yes, they’ll tell you just to take a picture to prove the damage. Still don’t sign. It’s a nightmare to pin liability on anyone else once you’ve signed for the boxes.
The moment of truth. This is when you check what's expected versus what's actually received. This will allow you to create a master sheet of your inventory, which will become your reference point for future stock checks. You sheet could include:
You can do this with a barcode scanner or good old pen and paper. The most important thing is to get your hands or scanner on each product. Note down any defects or issues that need to be reported to the manufacturer or will impact saleability.
Using your preferred inventory management tech, carry out regular stock checks so you can keep track of inventory levels and shrinkage rates.
Minimise your losses by factoring potential shrinkage into your unit pricing. I’d suggest 10% of your cost price as a good starting point for a markup to cover retail losses. But this will depend on your sector and product, so do your research to see what level of shrinkage you can expect. If you're within your company's margin of loss every time you count your stock, happy days. If not, you’ve got it covered.
Inventory: we love to have it and sell it, and it needs to be cherished to get it safely into the hands of our customers. But it can be fickle and unreliable, so we also need to do everything in our power to mitigate those risks by:
Juni is not a bank – yet. We’re a financial technology company providing e-money services and as such are not part of a deposit guarantee scheme. Learn more about our license and how we keep your business and money safe.
Juni Technology AB (company number 559248-0908) is licensed and registered as an electronic money institution with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) (license no: 64025). Payment Card Solutions (UK) Limited (company number 05941947) and UAB B4B Payments Europe (company number 305539054) are regulated by the Financial Conduct Authority (ref: 930619) and the Bank of Lithuania (licence no: 76), respectively. The Juni Mastercard Corporate Card is issued by Payment Card Solutions (UK) Limited and UAB B4B Payments Europe pursuant to a license by Mastercard International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated. Juni Technology AB. Masthamnsgatan 21, 413 28 Göteborg, Sweden. © 2025 Juni. All Rights Reserved.
