It’s tough to stay organized. Without an intentional organization strategy, warehouse aisles get cluttered, desks get messy, and inventory spaces get chaotic.
In eCommerce businesses, knowing where your inventory is and how to quickly access it is the difference between profitability and losing money.
If you wear a lot of hats, you probably spend the lion’s share of your days putting out fires. But if you want your business to run like a well-oiled machine, being proactive about your inventory organization is key.
To help you keep track of your inventory, we’ve put together a list of inventory organization ideas.
15 inventory organization ideas
- Receive goods effectively
- Access your storage capacity
- Use racks and shelving
- Use ABC analysis to sort inventory
- Label everything
- Use safety stock
- Implement a digital inventory management solution
- Check your inventory levels regularly
- Create documented standard operating procedures (SOPs)
- Keep your employees trained on your SOPs
- Use “just-in-time” inventory management
- Regularly clean and maintain your warehouse
- Change your layout to be more efficient
- Use cycle counting to keep inventory levels accurate
- Implement a scanning system
1. Receive goods effectively
Receiving inventory can be a chaotic process, especially if you’re not prepared for it. Having a system in place will help you stay organized and on top of things.
This is where a lot of disorganization starts:
“Oh, I’ll just set this pallet over here, and I’ll deal with it later.”
“I don’t need to unbox these; they probably won’t sell for a while anyway.”
After several weeks of these shortcuts in your receiving workflow, you’ll wake up and realize you have a completely disorganized and inefficient inventory space.
As soon as your inventory arrives, take the time to properly receive it and put it away correctly. This will save you headaches in the long run.
This usually includes, but isn’t limited to:
- Fully unboxing all inventory
- Inspecting inventory for damage
- Scanning it into your inventory management software
- Properly sorting and categorizing it in your warehouse/inventory storage space
If you don’t have a designated inventory space, now is the time to create it. This doesn’t have to be a warehouse or even a huge room, just somewhere where you can easily keep track of your stock.
2. Assess your storage capacity
So let’s say your business is going gangbusters – you’re building up a loyal customer base, and you can barely keep up with orders.
Everything seems great until you realize that you can’t stock enough materials in your inventory space to fulfill all your orders.
Depending on the size of your inventory, you’ll need to either rent or buy additional storage space. For small businesses with a limited inventory, this might be a single shelving unit in your office or garage. For larger businesses, it could mean acquiring an entire warehouse.
Before making any purchasing decisions, you should also take into account how quickly your inventory turns over.
For example, if you sell perishables or seasonal items, you’ll need to account for a higher inventory turnover rate and plan your storage space accordingly.
If you’re not sure how much inventory space you need, there are a few things you can do to get an estimate:
- Check your sales data from the past year to see how much inventory you went through. This will give you a good idea of how much space you need to store your inventory.
- Look at your inventory management software to see how much inventory you currently have on hand. This will help you determine if you need more or less storage space.
- Ask yourself how quickly you want to be able to fulfill orders. If you need inventory quickly, you might need more storage space so you can keep a larger inventory on hand.
Once you have a good idea of how much inventory space you need, it’s time to start shopping around for storage options.
3. Use racks and shelving
Once you have your inventory space, it’s time to start thinking about how you’re going to store everything.
The most important thing is to make sure that your inventory is easily accessible.
This means using racks and shelving that allows you to see what you have in stock at a glance and reach items quickly when you need to fulfill an order.
There are a few things to keep in mind when choosing racks and shelving for your inventory:
- Size – Make sure the racks and shelves are big enough to hold your inventory. You don’t want items falling off or being too cramped together.
- Weight capacity – If you have heavy inventory, make sure the racks and shelves can support the weight.
- Ease of assembly – Unless you have someone who can assemble the racks and shelves for you, choose something that’s easy to put together.
Once you have your racks and shelves in place, it’s time to start organizing your inventory within your storage space.
4. Use ABC analysis to sort inventory
One of the most popular inventory organization methods is ABC inventory analysis.
This method categorizes inventory based on how important it is to your business.
For example, inventory that’s essential to your business would be considered “A” inventory, while inventory that’s not as important would be considered “C” inventory.
Here’s how it works:
- A inventory – This is inventory that’s essential to your business. This might include items that are high-priced or high-demand.
- B inventory – This is inventory that’s important to your business, but not as essential as A inventory. This might include items that are lower-priced or lower-demand.
- C inventory – This is inventory that’s not as important to your business. This might include items that are low-priced or low-demand.
Once you’ve categorized your inventory, you can start organizing it within your storage space.
For example, you might want to keep A inventory closer to the front of your space so it’s easy to find and reach. Likewise, you might want to keep C inventory on higher shelves, so it’s out of the way.
The key is to find a system that works for you and your business.
There are a few other inventory organization methods you can use, but ABC analysis is a good place to start.
Once you have your inventory sorted, it’s time to start thinking about how you’re going to keep track of it all.
5. Label everything
One of the best ways to keep track of inventory is to label everything.
This might seem like a lot of work, but it’s worth it in the long run.
Labeling inventory helps you stay organized and makes it easier to find items when you need them.
There are a few different ways you can label inventory:
- Use a labeling system – There are many different types of inventory labeling systems you can use. This might include color coding, barcodes, or numbering.
- Use labels – You can buy labels specifically for inventory. These labels usually have adhesive, so you can attach them to storage containers, shelves, or inventory items.
- Use inventory software – Some inventory software programs have built-in labeling features. This can make it easier to label and track inventory.
No matter what method you use, make sure to label every item in your inventory. This includes storage containers, shelves, and individual inventory items.
If you have a lot of inventory, you might want to consider hiring someone to help you with the labeling process.
For more warehouse labeling best practices, read our related blog post.
6. Use safety stock
Safety stock is a term for inventory that is kept on hand in case of emergencies. This could be inventory that is needed to fulfill orders or inventory that is needed to keep production running smoothly.
How much safety stock should you have? There is no one-size-fits-all answer to this question, as the amount of safety stock you need will vary depending on your business. However, a good safety stock formula will tell you to have enough inventory to cover at least two weeks’ worth of demand. This will help you avoid any supply disruptions in the event of an emergency.
By having safety stock on hand, you can avoid any inventory issues that might arise. This will help you keep your business running smoothly and avoid any disruptions.
Calculating your safety stock can get a little complicated, but with some guidance and patience, anybody can do it.
7. Implement a digital inventory management solution
If you want to take your inventory management to the next level, consider implementing a digital inventory management solution.
An IMS can help you track your inventory in real-time, so you always know what you have in stock. Additionally, it can automate many of the tedious tasks associated with inventory management, such as reordering products and generating reports.
For example, SkuVault Core inventory management software offers many features that can help you manage your inventory more effectively, such as:
- Real-time inventory tracking
- Automatic reordering
- Generating reports
- Multichannel support
- Integrations with all other mission-critical business applications
You may be able to get away with managing your inventory with manual spreadsheets for a little while, but if you want to stay organized and grow your business, an inventory management solution is a must.
For more on how SkuVault Core helps grow profitable and automated businesses, check out our features page.
8. Check your inventory levels regularly
Once you have your inventory sorted and labeled, it’s important to check your inventory levels on a regular basis. This will help you stay on top of inventory and avoid any issues that might arise.
There are a few different ways you can check inventory levels:
- In-person – If you have a small inventory, you can physically count inventory levels yourself. This is the most accurate method, but it can be time-consuming if you have a lot of inventory.
- Spreadsheets – Another option for tracking inventory levels is to use spreadsheets. This can be done manually or through inventory software.
- Inventory software – By far, the most efficient method for tracking inventory levels is to use inventory software. This will allow you to track inventory in real time and get alerted when inventory levels are low. Software is also essential for businesses that ship out a lot of SKUs or manage multiple warehouses.
9. Create documented standard operating procedures (SOPs)
If you want your inventory management to run like a well-oiled machine, it’s important to have documented standard operating procedures (SOPs). SOPs are step-by-step instructions for executing a repeatable task.
You should have SOPs for:
- Receiving inventory – When inventory arrives at your warehouse, it’s important to have a process in place for receiving and inspecting it.
- Storing inventory – You should have specific procedures for how inventory is stored in your warehouse. This includes where items are stored and how they are labeled.
- Picking inventory – When an order comes in, you need to have a process for picking inventory and getting it ready for shipping.
- Shipping inventory – Finally, you should have procedures in place for shipping inventory out to customers. This includes packing orders and printing labels.
SOPs are essential for keeping your inventory management organized and running smoothly. By having SOPs in place, you can be sure that all your employees are “playing from the same piece of music,” so to speak.
10. Keep your employees trained on your SOPs
It’s one thing to have SOPs in place, but it’s another thing entirely to make sure your employees are trained on them.
If you want your inventory management to run smoothly, it’s important to keep your employees up-to-date on your procedures.
There are a few different ways you can train employees on your inventory management SOPs:
- In-person training – The most effective way to train employees on inventory management SOPs is to do it in person. This allows you to go over procedures step-by-step and answer any questions employees might have.
- Video training – If you can’t train employees in person, another option is to create training videos. This is a good option if you have employees in different locations or if you want to be able to reference the training videos at any time.
- Written instructions – Another option for training employees on inventory management SOPs is to provide written instructions. This is a good option if your procedures are relatively simple or if you have employees who are better at following written instructions.
No matter how you choose to train your employees, it’s important that they are up-to-date on your inventory management procedures.
By keeping your employees trained, you can be sure that your inventory management will run smoothly.
11. Use just-in-time inventory management
Just-in-time inventory management is an inventory strategy that involves only ordering inventory as you need it.
This can be a good option for businesses that don’t have a lot of storage space or that want to save on inventory costs.
The main downside of just-in-time inventory management is that it can lead to inventory shortages if your suppliers can’t keep up with your demand.
Overall, just-in-time inventory management is a good option for businesses that want to save on inventory costs.
12. Regularly clean and maintain your warehouse
In order to keep your inventory organized, it’s important to regularly clean and maintain your warehouse.
Cleaning and maintaining your warehouse will help you:
- Find inventory more easily
- Prevent inventory from getting damaged
- Keep your employees safe
Some things you should do to clean and maintain your warehouse include:
- Sweeping and mopping the floors
- Wiping down surfaces
- Organizing inventory on shelves
- Taking out the trash
By regularly cleaning and maintaining your warehouse, you can help keep your inventory organized and in good condition.
13. Change your layout to be more efficient
If you’re finding that your inventory management isn’t as efficient as it could be, one option is to change your layout.
A more efficient layout can help you:
- Find inventory more quickly
- Prevent inventory from getting lost
- Make better use of your space
Some things you can do to change your layout include:
- Putting inventory closer to the door or processing area for easy access
- Organizing inventory by type (remember the ABC sorting method!)
- Creating more space for high-demand items
14. Use cycle counting to keep inventory levels accurate
If you hate auditing, you’re not alone. However, inventory audits don’t have to mean shutting down all operations for 12 hours while you miserably scan each and every item.
Cycle counting may be a better way forward for your business. Cycle counting is an inventory auditing method where inventory is counted on a rotating basis rather than all at once.
There are a few benefits of cycle counting:
- It’s less disruptive to business operations since you’re only counting a small section of inventory at a time
- It helps identify inventory discrepancies more quickly
- It can be done more frequently, which means inventory levels are more accurate
- Counting duties can be rotated among employees, lessening the burden and adding a layer of accountability
If you’re looking for a way to improve your inventory management, cycle counting may be a good option for you.
15. Implement a scanning system
Another way to improve inventory management is to implement a scanning system. Scanning inventory can help you:
- Track inventory levels in real-time
- Prevent inventory from getting lost
- Make it easier to find inventory
Some things you should consider when implementing a scanning system include:
- The type of scanner you will need
- Your scanning technology of choice (more on that below)
- The inventory management software you will use
- How you will train your employees to use the system
The benefits of scanning are numerous, including reducing human error, being able to track inventory in real-time, and increasing accuracy.
The two most popular scanning systems are barcodes and RFID tags.
Barcoding is the use of optical codes consisting of lines and dots that are scanned by a barcode scanner, which converts the image into digital data. This data can then be used to track inventory, as well as other information about the product.
The benefits of using barcodes are many, including the ability to track inventory levels, product information, and much more. Barcodes can also be used to automate inventory management processes.
RFID tags are similar to barcodes but use radio waves to communicate with a scanner. This allows for a much wider range of data to be stored on the tag, as well as the ability to scan through materials, such as boxes and pallets.
FAQs about inventory organization
How do you organize your inventory list?
There are a few options for organizing inventory lists, including:
- Organizing inventory by type
- Organizing inventory by location
- Organizing inventory by ABC classification
Which method you choose will depend on your business’s needs. For example, if you have a lot of inventory, organizing it by type may be the best option. Or, if you have inventory in multiple locations, organizing it by location may be the best way to keep track of everything.
How often should you audit your inventory?
The frequency of inventory audits will depend on your business’s needs. However, most businesses choose to audit their inventory on a yearly basis.
As mentioned above, cycle counting is an inventory auditing method where inventory is counted on a rotating basis rather than all at once. This means that inventory can be audited more frequently, which can help to ensure accuracy.
How do I keep my warehouse organized?
If you follow all the tips mentioned above, you’ll likely have the most organized warehouse of all time. However, if you can only choose a few, here are the most important:
- Use inventory management software to track inventory levels and product information.
- Implement a scanning system to scan inventory and prevent it from getting lost.
- Train your employees on how to use the inventory management system and scanning system.
- Audit your inventory on a regular basis, such as yearly or monthly.
Organizing inventory can seem like a daunting task, but it doesn’t have to be. By following the tips mentioned above, you can create an inventory management system that works for your business.
And don’t feel like you need to implement them all today. Start with the most important ones mentioned above, and take them one at a time.
When you’re ready to streamline your inventory management, we’d love to chat about how SkuVault Core can help you stop putting out fires and start growing (without all the headaches).
Click the button on this page to schedule a live demo to see how it works or read about how we help on our features page.