Creating your ecommerce inventory checklist

Creating your ecommerce inventory checklist

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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:

  1. Always washing new clothes when you get them home from the shop
  2. Keeping track of your inventory to avoid your own warehouse horror shows

It’s the second one I’m focusing on in this article. We’ll take a look at:

  • The importance of maintaining a stock list
  • How to approach checking your inventory
  • Your inventory checklist

The importance of stock lists

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.

How to approach checking your inventory

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?

Right product, right place, right time

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.

Asset vs liability

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.

Prepare for the worst

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.

Your inventory checklist

How do you go about putting some of those considerations into action? Here’s my inventory checklist of all the things you need.

Choose the right tech

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.

Pick your warehouse wisely

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.

Triple-check your Incoterms

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.

Arrange insurance

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.

Don’t sign for damaged boxes

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.

Do a stocktake

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:

  • Product name
  • Any variants (such as quantities, colours, or sizes)
  • SKU
  • Barcode
  • Current stock level
  • Minimum and maximum stock levels
  • Stock on order
  • Damage or problems

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.

Keep counting

Using your preferred inventory management tech, carry out regular stock checks so you can keep track of inventory levels and shrinkage rates.

Build a loss budget into your pricing

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.

Our love-hate relationship with inventory

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:

  • Using tech, stock lists, and inventory checklists to get the right product in the right place at the right time
  • Counting stock early, regularly, and meticulously
  • Training others who have responsibility for our inventory to maintain your standards of accountability
  • Insuring and pricing to account for worst-case scenarios

I'd love to help you with any inventory-related issues you may be having. Reach out and we'll take a look together. Just drop an email to community@juni.co and I’ll be in touch.

Creating your ecommerce inventory checklist
Stephen Bourke
Ecommerce Store Manager

Stephen has over 4 years of experience running businesses and assisting entrepreneurs with Shopify stores. When he's not setting up shop, Stephen enjoys a good board game with his husband and friends. He's known for trying adventurous vegan cuisines.

Download our free whitepaper and gain important ecommerce and marketing insights, directly from Juni.

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Juni will not share your information with any third parties except for our verified partner network. Submit your email for even more valuable content, delivered straight to your inbox.

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