Why inventory management matters
Poor inventory management costs Indian retailers an estimated 8–12% of revenue annually — through stockouts, dead stock, and theft. Here are 10 practical tips.
1. Set reorder levels for every product
Don't wait until you run out. Set a minimum stock level (reorder point) for each product. When stock hits that level, your system should alert you automatically.
Formula: Reorder Point = (Daily Sales × Lead Time in Days) + Safety Stock
2. Use the ABC analysis method
Classify your inventory:
3. Track batch numbers and expiry dates
For pharmacies, grocery stores, and food businesses, tracking batch numbers is mandatory under GST for returns/recalls. OwnStore supports batch tracking with expiry alerts.
4. Do a physical stock count regularly
At minimum: monthly spot checks on A items, quarterly full count. Differences between physical and system count reveal shrinkage and theft.
5. Use barcodes for fast billing
Barcode scanning eliminates manual entry errors at the counter. OwnStore's Android app lets you scan barcodes with your phone camera.
6. Track variants separately
A blue XL kurta and a red M kurta are different products. Track them as separate variants with separate stock counts.
7. Set up low stock alerts by email/SMS
Get notified before you run out — not after a customer complains.
8. Calculate your inventory turnover ratio
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory Value
A ratio below 4 in retail usually means too much dead stock. Higher is better.
9. Track your dead stock
Products that haven't moved in 90+ days are costing you money. Consider discounts, bundling, or returning to supplier.
10. Integrate billing with inventory
Every sale should automatically reduce stock. Manual updates create errors. OwnStore does this automatically — each invoice instantly updates your stock levels.