Inventory Management Checklist

• Audit your current POS/ERP system to ensure every SKU has a unique barcode and correct cost/retail price entered.
• Integrate all sales channels (e-commerce, physical store, social selling) into a single “source of truth” database to prevent selling the same item twice.
• Establish a “zero-tolerance” policy for manual transactions; every item leaving the store must be scanned out.

Initial Setup / Daily Use

• Export sales data from the same month last year (Historical) and adjust for current growth trends (e.g., “We are up 10% YoY”).
• Factor in upcoming local events (festivals, construction) or marketing campaigns that might spike traffic.
• Create a “Open-to-Buy” (OTB) plan that limits how much inventory buyers can purchase based on these forecasts.

• Calculate the reorder point for top sellers using the formula: (Average Daily Sales × Lead Time).
• Input these figures into your system to trigger automatic “Low Stock” alerts.
• Review lead times with suppliers to ensure your math reflects reality (e.g., did shipping increase from 5 days to 10?).

• Identify your “Never-Out” items (best-sellers that drive traffic) and assign them higher safety stock buffers.
• Analyze supplier reliability; increase safety stock for vendors who frequently deliver late or short-ship.
• Adjust safety stock down during slow seasons to free up cash flow.

• Balance the cost of ordering (shipping fees, processing time) against the cost of holding stock (storage, insurance).
• Shift from ordering “as needed” to bulk ordering for staple items to hit free-freight thresholds.
• For slow movers, switch to “Minimum Order Quantity” (MOQ) purchasing to avoid overstocking.

• Schedule a “Wall-to-Wall” count annually (usually fiscal year-end) where operations pause.
• Map the store and stockroom into zones; assign teams to specific zones to prevent double-counting.
• Reconcile variances immediately and investigate why they happened (Theft? Receiving error? Wrong barcode?).

• Create a “Vendor Scorecard” tracking on-time delivery rates and fill rates (did they send everything you ordered?).
• Negotiate “Return to Vendor” (RTV) authorizations for products that fail to sell after a certain period.
• Consolidate orders to fewer suppliers to gain leverage for better payment terms (e.g., moving from Net 30 to Net 60).

• Category A (Top 20% of items, 80% of revenue): Count these weekly; never let them run out.
• Category B (Next 30%): Count monthly; keep moderate stock.
• Category C (Bottom 50%): Count semi-annually; carry minimal stock or make them “special order only.”

• Run an “Aged Inventory Report” monthly to identify items sitting longer than 90 days.
• Implement an automatic markdown cadence (e.g., 30 days = 10% off, 60 days = 25% off, 90 days = Clearance).
• Move stagnant items to “hot spots” (end caps or checkout counters) before discounting them.

• Identify products with short lead times (local suppliers) or high storage costs (bulky items).
• Establish a “dropship” agreement where the supplier ships directly to the customer for large items (furniture, equipment).
• Coordinate delivery schedules so stock arrives exactly when shelf space opens up.

• Calculate turnover rate: (Cost of Goods Sold / Average Inventory Value).
• Compare your rate against industry benchmarks (e.g., Apparel usually aims for 4-6 turns per year).
• Investigate categories with low turnover to stop future buying until stock clears.

• Replace or supplement the massive annual count with daily mini-counts (e.g., count 10 SKUs every morning before opening).
• Focus cycle counts on “A” items and items with recent discrepancies.
• Track “Inventory Accuracy” as a KPI for the operations team.

• Create a “Quarantine Zone” in the backroom for returned items so they aren’t accidentally put back on the shelf as new.
• Train staff to inspect returns immediately: classify as “Resellable,” “Damaged/Discount,” or “RTV” (Return to Vendor).
• Track return reasons to identify quality control issues with specific products.

• Switch from manual price stickers to barcode scanning.
• Investigate RFID tags for high-volume or high-theft items to automate counting.
• Use handheld scanners for receiving shipments to ensure the packing slip matches the physical goods instantly.

• Train stockroom staff on “FIFO” (First In, First Out) to prevent expiration or dust accumulation on old stock.
• Teach sales staff how to look up “Stock at other locations” or “Incoming shipments” to save sales.
• Create a checklist for “Receiving Procedure” to ensure boxes are counted and inspected before the delivery driver leaves.

□ All sales channels integrated (Omnichannel).

□ Every SKU has a barcode/cost entered.

□ “Zero Manual Transaction” policy active.

□ Not Started

□ In Progress

□ Complete

□ Handheld scanners used for receiving.

□ Barcode system fully operational.

□ RFID feasibility study conducted (if applicable).

□ Not Started

□ In Progress

□ Complete

□ Receiving checklist posted in the delivery bay.

□ FIFO training completed for stock team.

□ Sales team trained on inventory lookup tools.

□ Not Started

□ In Progress

□ Complete

□ Historical data + Growth trends analyzed.

□ Local event calendar integrated into plan.

□ Open-to-Buy (OTB) limits set for buyers.

□ Not Started

□ In Progress

□ Complete

□ Formulas applied to top sellers.

□ Auto-alerts for “Low Stock” configured.

□ Supplier lead times verified in system.

□ Not Started

□ In Progress

□ Complete

□ “Never-Out” list identified.

□ Buffers set for unreliable vendors.

□ Seasonal adjustments scheduled.

□ Not Started

□ In Progress

□ Complete

□ Inventory classified (A=Top 20%, B=Next 30%, C=Bottom 50%).

□ Management focus aligned to “A” items.

□ “C” items reviewed for discontinuation.

□ Not Started

□ In Progress

□ Complete

□ Bulk ordering used for staples (freight savings).

□ MOQs respected for slow movers.

□ Holding costs vs. Ordering costs analyzed.

□ Not Started

□ In Progress

□ Complete

□ Vendor Scorecards created/sent.

□ Return authorizations (RTV) negotiated.

□ Payment terms reviewed for cash flow.

□ Not Started

□ In Progress

□ Complete

□ Dropship agreements signed for bulky items.

□ Delivery schedules coordinated with shelf space.

□ Short lead-time vendors identified.

□ Not Started

□ In Progress

□ Complete

□ “Quarantine Zone” established.

□ Triage process (Resell/Damage/RTV) active.

□ Return reasons tracked for QC issues.

□ Not Started

□ In Progress

□ Complete

□ Annual count date scheduled.

□ Store mapped into counting zones.

□ Variance investigation protocol defined.

□ Not Started

□ In Progress

□ Complete

□ Aged Inventory Report generated monthly.

□ Markdown cadence (30/60/90 days) automated.

□ Stagnant stock moved to high-traffic zones.

□ Not Started

□ In Progress

□ Complete

□ Turnover rate calculated monthly.

□ Rates compared to industry benchmarks.

□ Buying paused for low-turnover categories.

□ Not Started

□ In Progress

□ Complete

□ Daily count routine established (e.g., 10 items/day).

□ Focus placed on “A” items.

□ Accuracy KPI tracked on dashboard.

□ Not Started

□ In Progress

□ Complete