Without inventory management, a store sells goods it does not have and loses money on leftover stock. We cover SKUs, receiving, reservations, stocktaking and choosing a tool for a small business.
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Inventory management for a small online store starts with three things: a unique SKU for every product, a single place for stock levels and documents that record every movement of goods. Then you add reservations for orders, regular stocktaking and stock synchronization with the website. The tool is chosen by the number of products and orders; at the start a spreadsheet is often enough.
Without inventory records, a store learns about problems from its customers: an ordered item is missing from the shelf, the stock in the product card does not match reality, money is tied up in items that do not sell. Inventory management answers simple questions: what you have, where it is, what is running out and what has not moved for a long time.
This article covers operational inventory records. Accounting and tax records follow their own rules, so check the documents and how to issue them with your accountant and current regulations.
| Indicator | What it means | What it is for |
|---|---|---|
| Physical | Goods that are actually in the warehouse | The basis for stocktaking |
| Reserved | Goods assigned to orders that have not been shipped yet | Prevents selling them a second time |
| Available | Physical stock minus reserved | This is the number the customer sees on the website |
| In transit | Ordered from the supplier, not received yet | Helps plan purchases and lead times |
| Minimum | The threshold below which you need to restock | A signal to reorder |
Customers on the website see the available stock. If the system shows physical stock, you risk selling one unit twice.
To start, one spreadsheet with these columns is enough: SKU, name, variant, storage location, physical stock, reserved, available stock, minimum stock, purchase price, supplier, date of last movement. Add a separate sheet for movement documents: date, type, SKU, quantity, order or delivery note number, person responsible. Calculate the available stock with a formula so nobody enters it by hand. Protect the formulas from accidental editing and limit the number of people who have access.
Check the goods against the supplier's delivery note for quantity, SKUs and condition. Record discrepancies right away, while you can still contact the supplier. After receiving, the goods get a label and a storage address.
Keep fast-moving items closer to the picking area, large and heavy goods at the bottom, fragile ones separately. Arrange goods with a shelf life so that older items stay in front.
During picking the available stock decreases, after dispatch – the physical stock. Process returns with a document: after inspection the item either goes back into stock or goes to markdown or write-off. If you skip this step, stock levels drift away from reality.
Barcodes reduce the number of errors during receiving and picking. You need them when there are many SKUs or several people run the warehouse. Use the manufacturer's code if there is one and your own labels for the rest of the goods. A scanner linked to the inventory program checks that exactly the right item has been taken and updates the stock immediately. At the start, with a small range, a printed checklist and neat shelf labeling are enough.
Stocktaking compares the records with what is actually on hand. Two forms are practical for a small store.
When you find a discrepancy, look for the cause: a receiving error, mixed-up items, a return without a document, damage or loss. Record the correction as a separate document and fix the process so the error does not happen again.
| Option | When it fits | Limitations |
|---|---|---|
| Spreadsheet (Excel, Google Sheets) | A small number of SKUs, one person in the warehouse | Manual entry, risk of errors, difficult synchronization with the website |
| Inventory in the online store platform | Stock is stored in the product cards | Features depend on the platform, movement documents may be weak |
| A dedicated inventory management program | Many SKUs, several employees, barcodes | Requires setup, training and integration with the website |
| An all-in-one system (ERP or CRM with inventory) | Several warehouses and sales channels | More complex implementation, higher maintenance costs |
Choose a tool with the coming year of work in mind. Criteria: the number of SKUs and orders, the number of people, the need for barcodes and serial numbers, integrations with the website, marketplaces and delivery services. It is easier to move from a spreadsheet to a program before errors become a daily occurrence.
The website should show the same thing the warehouse sees. For this, stock levels are transferred automatically or on a schedule, and the cart reserves the item during checkout. If you also sell on marketplaces, the stock should be shared across all channels and updated without delays, otherwise the risk of overselling grows.
Advertising also needs accurate availability data: ads and product feeds with outdated stock lead to disapprovals and canceled orders. So set up regular updates of stock and prices and check the results.
Not always. At the start, a spreadsheet with clear rules is enough. When the number of SKUs and orders grows, manual entry leads to errors, and then it makes sense to move to a program connected to the website.
It is a unique internal code of a product variant. Each size and color has its own SKU, so the stock is counted precisely for every item.
It depends on turnover. Check fast-moving and expensive items every week or every month, and do a full count before the season or after noticeable failures.
Find the cause, issue an adjustment document and fix the process. Without this, the discrepancies will keep recurring.
Keep a single source of stock data, reserve the item during checkout, set up automatic synchronization with the website and keep a small buffer for popular items.
Inventory management starts with simple rules: SKUs, movement documents, splitting stock into physical, reserved and available, regular checks. As volumes grow, the inventory tool is connected to the website so the customer sees real availability. Make a list of your SKUs, assign the people responsible and schedule your first stocktake. The LightSEO team from Mukachevo has been building websites and online stores since 2015 and can help with online store development and launch and with preparing accurate availability data for Google Shopping.
