How to Set Up a Simple Inventory Count for a Small Shop
If you sell handmade goods, resell thrift finds, or run a small online shop, you don't need inventory software to know what you have. A simple spreadsheet and a regular count will tell you what's in stock, what's selling, and how much money is sitting on your shelves.
Step 1: Give every item a short SKU
A SKU is just a code you make up so each product has one name. Keep it short and readable:
- CND-LAV-8 = candle, lavender, 8 oz
- TS-VINT-M-014 = vintage tee, medium, item 14
One-of-a-kind resale items can each get a number. Products you make in batches share one SKU.
Step 2: Set up one inventory sheet
Use one row per SKU with these columns:
| SKU | Item | Location | Qty on hand | Cost per unit | Stock value | Reorder at |
|---|---|---|---|---|---|---|
| CND-LAV-8 | Lavender candle 8 oz | Shelf A | 14 | $4.10 | $57.40 | 5 |
| CND-CDR-8 | Cedar candle 8 oz | Shelf A | 3 | $4.25 | $12.75 | 5 |
| TS-VINT-M-014 | Vintage band tee (M) | Bin 2 | 1 | $6.00 | $6.00 | — |
Stock value = Qty on hand × Cost per unit. Add it up and you know how much cash is tied up in inventory.
Step 3: Label where things live
A count is only quick if you can find everything. Name your spots (Shelf A, Bin 2, Tote 3) and put the location in the sheet. When something moves, update its row.
Step 4: Record changes as they happen
Each time you make, buy, or sell something, adjust Qty on hand. If that's too fiddly, keep a simple log (date, SKU, +/− quantity, reason) and update the totals once a week.
Step 5: Do a physical count on a schedule
Your sheet will drift from reality. Missed sales, damaged items, and samples you gave away all add up. Pick a rhythm:
- Weekly spot check: count your 5–10 best sellers.
- Monthly or quarterly full count: count everything, shelf by shelf.
Write the counted number next to what the sheet says. If they don't match, the difference is shrinkage. Fix the sheet, and if one item keeps coming up short, find out why.
Step 6: Use the numbers
- Reorder point: when Qty on hand hits "Reorder at," restock or make another batch.
- Slow movers: anything that hasn't sold in 90 days is cash sitting still. Try bundling it, marking it down, or relisting it with better photos.
- Year-end: many sellers need a starting and ending inventory value for their records. A dated full count makes that easy. (This isn't tax advice, so check what applies to you.)
A 15-minute monthly routine
- Print or open the sheet and walk your shelves in order.
- Write the counted quantity for each row.
- Fix any mismatches and note why.
- Sort by Qty on hand to see what needs reordering.
- Total the stock value and log it with the date.
To see how your inventory turns into profit, pair this with a sales log. If you resell, our Reseller Inventory & Profit Tracker logs each item's cost, sale price, fees and profit, and shows items in stock and inventory value. For handmade sales and costs by month, our Side Hustle Income & Expense Tracker lets you log each sale, its costs, and your monthly profit in one place.
Try the free reseller profit calculator →
Related template: Reseller Inventory & Profit Tracker. Also see: Side Hustle Income & Expense Tracker
See all Cedar & Ledger templates
Frequently asked questions
What does this guide cover?
Give items SKUs, keep one inventory sheet with stock value and reorder points, label locations, and run a quick monthly physical count.
What are the steps?
1) Give every item a short SKU; 2) Set up one inventory sheet; 3) Label where things live; 4) Record changes as they happen; 5) Do a physical count on a schedule; 6) Use the numbers.
Do I need a template to do this?
No. A notebook or a sheet you build yourself works fine. Cedar & Ledger also sells spreadsheet templates (I'd earn from a purchase); see the template box at the top of this page.
Is this financial advice?
No. It's general information with example numbers only, not financial, tax, legal or medical advice. Use your own numbers and check anything important with a qualified professional or the official source.