As you already know, you need to safeguard the finances within your small business, and there’s all the basic things that a small business already knows to do, but have you noticed any problems with your inventory? Well, lack thereof? You see, inventory doesn’t usually disappear in some big, Hollywood movie moment. Well, maybe sometimes you see that on the news, but it’s super rare. Instead, what usually happens is that it’s more like a slow leak.
How? Well, it might be a box that shows up lighter than it should, maybe a pallet that gets split and never fully logged, a return that “definitely” came back but somehow didn’t. For a lot of retail and especially ecommerce, this is sadly the norm too. And the worst part of it all is how quickly it turns into finger-pointing, because nobody wants to be the person who lost something expensive.
So what exactly is the problem then? Well, most small businesses don’t have an “inventory problem.” They have an accountability problem, that’s the main thing to keep in mind here, and it’s not because people are bad or are trying to steal (yes, this can happen, but it’s not always the case), but because the process is loose.
Start Treating Shrinkage Like a Process Problem
While it’s really tempting to assume missing stock means someone’s stealing. Sometimes that’s true, but a lot of the time, it’s mis-picks, mislabels, partial shipments, and messy receiving routines where items get put down “for a second” and then get absorbed into the background.
So the first shift is mental. If shrinkage gets treated like a morals issue, people get defensive and quiet. If it gets treated like a process issue, it becomes fixable. So the goal is building a routine where mistakes are harder to make and excuses are harder to lean on.
It’s Time to Tighten the Hand-Offs
Most inventory loss happens in the gaps. This includes things like receiving from the shelf, shelf to packing, packing to dispatch, dispatch to carrier, and carrier to customer. But every handoff is an opportunity for confusion, and confusion is basically the best friend of loss, if you think about it. So there needs to be a closed loop.
So, that means counts get confirmed at the moment of transfer, not three hours later when nobody remembers what was on the cart. It also means one person owns each step, even if multiple people help; this is the best way to narrow down accountability so there’s no finger-pointing happening.
It’s Time to Build Proof into Packaging and Dispatch
Yep, if you’ve already experienced it by now, then you probably have a general idea of how brutal customer disputes can be. But it gets a lot worse, especially the “it arrived opened” or “it wasn’t in there” complaints. Sometimes it’s fraud, sometimes it’s legit, but either way, it’s the business eating the cost unless there’s a clear system to fall back on.
Nowadays in order for a business to protect itself, they’re having to have more layers of security, more guardrails if you want to call it that. For example, using Universeal can be used since these are seals used for outbound packages, cages, bins, and honestly, they’re especially useful for high-value items or when there’s multiple handoffs until it gets to the customer (and these seals how is theres been no tampering).
Any Warehouse Mistakes Happening?
Inventory also disappears through basic operational sloppiness, which can add up fast. So all you need to do is look for repeat offenders like unlabelled overflow, mixed SKUs in the same bin, returns that sit in limbo, and “temporary” storage spots that become permanent black holes (which, yes, this last one is incredibly common).