Getting Started with Inventory Management

Welcome to your complete guide for setting up inventory management! Whether you’re moving from spreadsheets or starting fresh, this guide will walk you through everything you need to know.

What You’ll Learn

• Setting up your inventory categories
• Adding your first products
• Configuring reorder points
• Creating your first reports
• Best practices for daily operations

Prerequisites

Before we begin, make sure you have:

• A list of your current products
• Access to your inventory storage areas
• Basic product information (SKUs, prices, suppliers)
• About 30 minutes of uninterrupted time

Step 1: Setting Up Categories

The foundation of good inventory management is proper categorization. Here’s how to structure yours:

Create Main Categories

Start with broad categories that match your business:

Electronics
├── Computers
│   ├── Laptops
│   ├── Desktops
│   └── Accessories
├── Mobile Devices
│   ├── Phones
│   └── Tablets
└── Audio Equipment

Best Practices

1. Keep it simple: Start with 5-10 main categories
2. Think hierarchically: Use subcategories for organization
3. Be consistent: Use clear naming conventions

Step 2: Adding Your Products

Now let’s add your first products to the system.

Required Information

For each product, you’ll need:

• Product Name: Clear, descriptive name
• SKU: Unique identifier
• Category: From your category structure
• Unit Cost: What you pay suppliers
• Selling Price: What customers pay
• Initial Quantity: Current stock on hand

Pro Tip: Bulk Import

If you have many products, consider using CSV import:

SKU,Name,Category,Cost,Price,Quantity
LAP-001,Dell Laptop 15",Computers/Laptops,500,799,25
MOB-001,iPhone 13,Mobile Devices/Phones,600,899,50

Step 3: Setting Reorder Points

Prevent stockouts by setting smart reorder points.

The Formula

Reorder Point = (Average Daily Usage × Lead Time) + Safety Stock

Example Calculation

• Average Daily Usage: 10 units
• Lead Time: 5 days
• Safety Stock: 20 units
• Reorder Point: 70 units

Step 4: Configuring Locations

If you have multiple storage areas, set them up now:

1. Main Warehouse: Primary storage
2. Retail Floor: Customer-facing stock
3. Returns Area: Items awaiting processing

Location Tips

• Use clear, consistent naming
• Include aisle/bin information
• Consider barcode labels for accuracy

Step 5: Your First Stock Count

Start with accurate numbers:

1. Print count sheets from the system
2. Count systematically - don’t skip around
3. Double-check high-value items
4. Update the system immediately

Step 6: Daily Operations

Morning Routine (5 minutes)

• Check low stock alerts
• Review pending orders
• Verify yesterday’s transactions

End of Day (10 minutes)

• Process all receipts
• Update any manual sales
• Review tomorrow’s deliveries

Common Pitfalls to Avoid

1. Overcomplicating Categories

❌ “Electronics > Computers > Laptops > 15-inch > Dell > Inspiron”
✅ “Laptops > Dell Inspiron”

2. Ignoring Reorder Points

Set them once and review monthly. Don’t wait for stockouts!

3. Delayed Data Entry

Enter transactions immediately. Old data = bad decisions.

Next Steps

Congratulations! You’ve set up your basic inventory system. Here’s what comes next:

1. Week 1: Focus on accurate data entry
2. Week 2: Fine-tune reorder points
3. Week 3: Generate your first reports
4. Month 2: Analyze trends and optimize

Quick Reference Checklist

• Categories created
• Products added
• Reorder points set
• Locations configured
• Initial count completed
• Team trained on daily processes

Need Help?

Remember, good inventory management is a journey, not a destination. Start simple, be consistent, and improve over time.

Ready to get started? Try Inventory Manager free for 14 days and see how easy inventory management can be.