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One important part of small business inventory management is a proper organization of your stockroom, especially if you own a small business in retail. This is easy to understand, since most of the operations regarding your inventory go down in the stockroom, and this is where stock units are kept.

However, some business owners still have some bad practices, either because they don’t know any better, or maybe because they think their current setting is good enough. But errors in the stockroom may be costing you serious money. We’re about to see how, with our small business inventory management tips to improve your stockroom.

1. Maximize Vertical Space

When running a stockroom, one of the most important things in small business inventory management is to have free space. A common error is to have just enough room to accommodate your entire stocks. This makes reorganizing and auditing the stockroom a very difficult task because everything is so cramped. Furthermore, it puts you in trouble in the eventuality of a future business growth.

With this in mind, another mistake that some owners commit is to buy relatively low shelving and fill the whole stockroom with it, thinking that it is more than just enough for future needs. But if business booms, you’re in trouble again. Even if you decide to replace the shelving then, it will be a nightmare to remove all the packages to another location so that you can perform the remodeling.

The best solution, then, is to buy the highest possible shelving from the get-go. Even if you can’t afford, or don’t want to install it on the entire space, you can easily add more units later. But at the end of the day, the more space you have, the better, and vertical space is just as good as horizontal.

2. Find a Way to Dispose Of Old Items

This is a big part of small business inventory management and for several reasons. First of all, if you’re running a business where you sell perishable goods, you should use a FIFO (First In, First Out) approach, and shouldn’t have old items in the first place, although it can happen.

If you’re not selling perishable goods, perhaps the old items have been replaced by a newer version. Maybe you’re in the clothing business, and a specific item has gone out of fashion, or you may be in the electronics field, and a certain piece of equipment has given place to a newer model.

Whichever the case may be, you don’t have a big chance of selling this type of items, not at their original price, anyway. Meanwhile, you are losing money, not just the money you invested in the first place, but because these units are taking up precious space in the stockroom.

The first solution is to sell these items at a discount price. You can be generous with it, depending on how old the items are, but the important thing is to clear up your stockroom. If discounting doesn’t work or is not an option, giving away to charity might be a good alternative. Not only you manage to free up space, but you also improve the image of your company or your brand as one that cares about people’s well being.

3. Have an Area for Notes/Suggestions

In small business inventory management, it is paramount that operations run smoothly in your stockroom. But most of the time, employees go there in a rush because customers are waiting at the front, especially in retail. So, even if your staff notices that some things are amiss, they end up forgetting it due to being in a hurry all the time.

One original thing you can implement is to install a large whiteboard or blackboard near the stockroom exit. Blackboard may not be as appropriate, because of the mess created by chalk, but that depends on your business.

This way, every time your employees notice that there is a problem, they can quickly jot it down when they’re leaving the stockroom. This way, no information is lost. You can then have a staff meeting at the end of the day or the week, to discuss these issues in greater detail, and see what can be done to improve.


We hope these small business inventory management tips to improve your stockroom were useful. Obviously, there are other great ideas we could have talked about, like investing in an inventory management system, but we’ll leave that for next time.