Inventory is the foundation of a business, and its effective management is the basis of any well-functioning business. Handling the activity of your business inventory could make or break the success of your business. That’s why you need to have a working knowledge of the inventory management of your business; else, you may not be able to make smart business decisions.

If you want to compete, survive and succeed as a business owner, then you need to pay close attention to your inventory management. However, this process, like any other, is susceptible to mistakes that could be extremely detrimental to your business.

But don’t worry!

This article highlights these mistakes with possible solutions. So, if you want to learn what these mistakes are and prevent them, this is the best stop for you.

Common inventory mistakes sellers make

  • Lack of expertise and inadequate training.

This is one inventory mistake common to sellers. It is a fact that not all employees are qualified to manage inventory. Accurate inventory management requires the right and qualified workers you trust to get the job done well. Inventory management is one task that seems like it is every worker’s responsibility, still, it is not advisable to have many individuals working with inventory. You only need a handful of dedicated workers to carry out the task.

Not all workers know how to operate inventory management software and when there is so much to do, tasks and responsibilities become unclear with duplicated efforts most times. You need employees who have the necessary skills and experience needed for this task.

As a business owner, you have to ensure that those who operate the inventory system have adequate knowledge. There are high risks involved in giving the operation of an inventory system to someone with a lack of practical knowledge.


The solution to this is proper training. Any worker involved with the operation of an inventory system should be properly trained for the job to avoid future discrepancies. Employees should be trained for specialized roles to ensure the smooth running of a business, or better still, invest in skilled and experienced specialists. Inadequate training can adversely affect your business when keeping up with orders.

Also, it should not be just a person handling the inventory of your business. This is very risky. The management of the inventory should be in the hands of highly trained and experienced specialists with someone in charge to monitor the workings of others. The person in charge is responsible for ensuring the accuracy of the business’ inventory management and overall success. This implies a need for constant communication between those who manage the inventory and all other departments.

  • Lack of automation

This is one common mistake sellers are guilty of. Some business owners still track inventory manually. As appealing as this may be to some sellers, the bottom line is that manual tracking takes too much time, and it is prone to mistakes. Time, energy, and resources that should be channeled into other business areas are spent on manual tracking. This could amount to a loss if there are inaccurate elements.

Relying on pen and paper or spreadsheets alone is inefficient and prone to error. Spreadsheets and other manual processes lack analysis. They don’t operate in real-time, nor do they allow for access to multiple users simultaneously.


Instead of relying on manual tracking, you should consider investing in automated cloud-based inventory software. Inventory management systems are easier to update, and the availability of cloud storage prevents data loss. An automated system enables inventory management across departments and locations, accuracy in forecasting, cutting down on unnecessary labor costs, and overall growth in your business.

  • Lack of accurate forecasting

This is a common recurring mistake. When it comes to accurate inventory management, forecasting demand is very critical to sourcing and producing the right number of items. The demand forecast is very important for customer service. A lack of forecast or even doing so inaccurately frustrates workers, which in turn frustrates customers.

When the customers’ needs are not met, there is a tendency for customer satisfaction to drop, resulting in these customers going elsewhere.


The answer to this is simply to invest in an automated inventory management system that provides accurate data. This provides real-time data, so you never have outdated information. With this accuracy, you will always be up-to-date with customer demands, thus ensuring that you satisfy the needs of the customers, which then leads to customer retention.

The automated inventory management system is useful for proactive forecasting. Forecasting is especially helpful in determining popularity from unwanted products to avoid purchasing items that are not necessarily doing well in the market.

  • Annual inventory checks

One common mistake sellers make is to set aside a particular day or period to check inventory. This often implies ceasing operations for an entire day or extended time. This is an outdated method that is not productive at all. This is the case because when you check inventory only once a year, you quite likely will not notice discrepancies for a very long time in your business. Also, it may be difficult to get to the root of the problem because you have months of records to go through. This is quite harmful to the survival of any business.


The alternative to this is cycle counting. This means that inventory is checked continuously throughout the year rather than once every year. Your business is way better off with frequent inventory checks as this would not necessitate the need to put business operations on hold, which could harm sales. This method is less disruptive and doesn’t consume too much time or resources. Regular inventory checks also enable errors to be more easily discovered.


Managing inventory can be quite a tedious task, and not paying attention to little details can lead to mistakes that could cost your business. With the knowledge of these mistakes, you can now take precautions and protect your business from these inventory mistakes or be prepared for potential unfavorable situations at least.

Good luck!

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