9 Inventory Management Tips for Indian Retailers and Distributors

Stock is usually the biggest investment a retailer or distributor makes. Too little and you lose sales; too much and cash sits on shelves. These nine habits help keep inventory accurate and working for you.

1. Record every movement in one system

Sales, purchases, returns, transfers and damages should all be recorded in the same system that does your billing. Every movement recorded somewhere else, such as a notebook or a separate spreadsheet, is a future mismatch.

2. Set reorder levels for fast movers

For your best-selling items, set a minimum stock level based on average daily sales and supplier lead time. When stock falls below it, reorder. Software can flag these items automatically so nothing slips through.

3. Use ABC analysis

Group items by value: A items are the small number that drive most of your revenue, C items are the long tail. Count and review A items more often, and negotiate better terms on them.

4. Track batches and expiry dates

For pharma, FMCG, food and cosmetics, track stock by batch and sell first-expiring stock first (FEFO). Expiry alerts help you move or return stock before it becomes a write-off.

5. Do small, regular cycle counts

Instead of one painful annual stock-take, count a few shelves or categories every week. Small, frequent counts catch errors early and keep your system stock reliable.

6. Watch ageing and dead stock

Review items that haven't sold in 60, 90 or 180 days. Bundle, discount or return them to suppliers before they lose more value, and adjust future purchases.

7. Keep godown and shop stock separate

Record stock by location so you know whether an item is on the shop floor, in the back room or in the godown. Transfers between locations should be documented, not shouted across the room.

8. Control who can adjust stock

Limit stock adjustments to trusted staff and review them regularly. Role-based permissions in your software make this easy and reduce shrinkage.

9. Let purchases follow data

Use sales history, current stock and reorder levels to plan purchase orders, rather than buying on instinct. Purchase orders also make it easier to match what you ordered with what arrived and what you were billed.

Saarthi brings these practices together: real-time stock across locations, batch and expiry tracking, reorder alerts, ageing reports and role-based permissions, all connected to your billing and purchases.