“If you have too much stock, a lot of your company’s money is tied up. The value of your inventory should not be bigger than your company’s total sales. Your inventory should move (sell and refill) about 5–8 times a year. If you sell food, it should move even faster.”

The size of your inventory depends on your business and if you have busy seasons. It is smart to keep the right amount of products if they sell regularly. But don't buy large amounts just because of discounts. In the long run, keeping unsold products on shelves is expensive.

“If products are not selling, it is better to sell them even at a loss than keep them. A business owner should know their market: what products sell quickly and what products need to be available immediately”, says Alasaari.

“If your company’s advantage is fast delivery, then you must always have products ready on the shelves. But remember: having too much can be risky if products expire or get damaged over time.”

Alasaari also advises keeping good relationships with your suppliers. Pay your bills on time. This way, you can get products quickly when needed. But remember: many suppliers have warehouses in other countries, which can delay deliveries by a few days.

How to Track Your Inventory

Alasaari and business service director Kjell Nydahl recommend using Excel to track your inventory.

“Write down how many pieces you have of each product and the delivery times. This way, you can easily see what is selling and what is sitting on the shelves for too long. Then, you can set "alert levels" –points when you must order more. You need to know how fast products sell and how long it takes to get new ones. Regular cleaning and inventory days are important”, reminds Nydahl.

Checklist for Successful Inventory Management

Start with good record keeping

• Write down all products: quantities, arrival dates, and prices.
• Use Excel, a cloud-based inventory program, or a simple ERP system – don’t trust your memory.

Update inventory in real-time

• When you sell or buy products, update your records immediately.
• Real-time updates prevent mistakes and surprises.

Do regular inventory checks

• Do a full inventory check every month or every three months.
• Physically check that real stock matches your records.

Learn about ABC analysis (Product Priority)

• A-products: Sell fast and/or have the biggest profit — always keep these available.
• B-products: Sell moderately — monitor carefully.
• C-products: Sell slowly — buy carefully, in small amounts.

Avoid overstocking and understocking

• Too much stock ties up money and risks expiring/damage.
• Too little stock means lost sales and customers.
• A good rule: keep stock for 1–2 months of sales, unless your business needs more.

Organize your storage clearly

• Label shelves, boxes, and areas.
• Use "First In, First Out" (FIFO): sell older products first.

Improve your ordering and delivery process

• Make a plan: how and when to order, and who is responsible.
• Avoid last-minute emergency orders – they are more expensive.

Use technology

• Small inventory programs (like MyStock, Odoo, or Shopify inventory apps) are cheap and easy to use.
• In the long term, automation saves a lot of time and reduces mistakes.

Analyze inventory performance

• Track: inventory turnover (how often stock sells out and refills), amount of unsold products, profit margins
• Use this information to improve buying and selling.

Prepare for seasonal changes

• Many businesses have busy seasons (like Christmas or summer sales).
• Plan your stock early and organize special sales campaigns.