Did you know that over 43% of small businesses either don’t track their stock levels or use manual processes to do so? This is an alarming statistic because effective stock management is crucial for any successful business. Like a stone being dropped into a pond, poor stock management will send ripples of repercussions throughout your business.

Having stock sit idly on the shelves will pile up the storage and maintenance costs, risk wastage and even be susceptible to theft from staff. Conversely, not having enough stock will put your business on the backfoot as you won’t be able to keep up with sales, forcing customers to purchase from your competitors. 

What does all this have in common? Lost profits.

Effective stock management is the linchpin of success for any business and its importance is growing. As we enter the exciting new digital era, businesses now have to fight it out in an arena of exceptionally high standards. All it takes is a mere whiff of intrigue and a few buttons pressed on the smartphone to receive a product within 24 hours. 


How does your business compare to these standards?


This is what your business is up against and having a weak grip on your stock control will turn that glass ceiling over your head into one that’s made of cement. To maximise the potential of your business, you need to understand the importance of stock control. Read on to find out more.

What is stock control?

Stock control is the process of knowing how much stock you have available to you at any given time, as well as the methods you have in place to keep track of stock. The term stock refers to any single item that you use as part of your product or service; ranging from raw materials to finished goods.

How can good stock control improve a business’ processes?

The overall objective is to reduce the cost of holding stock, whilst retaining the agility to respond to the demands of the customer. A delicate balance must be struck between understocking and overstocking, as they will both cost you money. 


If you’re an e-commerce business, then your ability to track the movement of every product will effectively dictate the future of your business. Not convinced? Let’s delve a bit deeper and explore the benefits. 

The cost associated overstocking goods

According to the IHL Group, the global cost of overstocking to businesses came to an astonishing $470 billion in 2015. Many businesses perish due to poor cash flow, yet such a fate can be avoided by establishing effective stock control. Like an anchor dragging you down, here are some ways that overstocking is harming your business.


Deterioration. If your stock has an expiration date, you’re in a race against time. Chucking unsold items in the bin is another way of setting fire to your capital.


Shrinkage. The more stock you have, the harder it is to protect it from theft, including from staff. Research carried out by the Centre of Retail Research highlights that the cost of retail shrinkage to UK businesses in 2019 was an astonishing £5.5bn.


Storage costs. Excessive stock levels require sufficient storage space. You’ll also have to pay for staffing, logistics and insurance. Not selling all of your stock will keep your business pegged at a deficit and harm your cash flow. 


Unbalanced cash flow. Losing money from poor inventory management will limit your ability to invest your capital into other areas of your business, preventing growth and development.

What about understocking goods?

A customer walks into your store and asks for the product that will solve their problem, only to discover that you don’t have any in-store. Dissatisfied, not only do they lose trust in you, but they’re also encouraged to spend their money elsewhere, most likely giving it to your competitors. 


IHL Group identified that understocking costs firms globally $630 billion worldwide in 2015. But the repercussions go beyond just profit loss:

  • Lost trust. If a competitor can provide the product but you can’t, what image does that portray of your business?
  • Lost sales. No sales, no money. As a business, you should be capitalising on every opportunity.
  • Damaged reputation. Forcing customers to look elsewhere is a serious inconvenience for them and will make you look incompetent. 



What issues can good stock control help with?

The winning formula for any leading e-commerce business is the use of advanced technology and software that tracks the movement of products and materials. Techniques such as item-level-tagging have revamped businesses’ supply chains by increasing inventory accuracy from an average of 63% to 95%


By implementing effective stock control procedures, your business will transform itself, helping you to  get ahead of the competition. Here’s what you can expect.

Guaranteeing customer satisfaction 

What instils trust in a brand? Consistency and quality. A business that meets customers’ demands with minimal disruption will pull you closer to your target market. Being able to instantly solve your customers’ problems will drastically increase the likelihood of a returned sale in the future.

Increasing warehouse organisation 

The warehouse is the beating heart of your business. Implementing a system that aligns everything, using well-organised procedures, does so much more than just encourage cohesion. It also:

  • Improves efficiency
  • Increases storage space 
  • Enhances customer service
  • Reduces waste
  • Speeds up inventory turnover

Improving time management

Quality stock control will track the exact location of every product down to the last metre. Not having to do a stock count every time there is a new delivery allows you to invest your time into other areas of your business. 

Preventing product shortages

More sales mean more profits. By keeping up with the demands of the market, your business will enjoy a healthy cash flow.  

Storage costs

Quite remarkably, efficient stock control can reduce inventory by up to 30%. By significantly reducing storage costs, you’ll have a lot more capital to re-invest into your business. 


The difference between businesses with effective stock control and those without it is like night and day. We’re now in an age where technological innovation and digital processes are at the heart of every business. Customers expect businesses to provide instant solutions to their problems in the form of either a product or a service. Profitable businesses are the ones able to meet these demands without having to tie up their cash flow from overstocking their products. 

Not being able to match these expectations because of issues relating to inventory management will reflect badly on your brand by making you seem incompetent and untrustworthy, a sure way to stay behind your competitors. However, a firm grip on the movement of your stock is the secret to having a more agile, responsive and successful business. 

If you require help with your stock inventory and management, our team has years of experience in supporting businesses across several industries, manage their stock efficiently. Give us a call on 01215596783 or drop us a line on the enquiries@adp-distribution.co.uk  to have a chat about your requirements.