How to stop losing money from poor stock management

The five most common stock management mistakes

Poor stock management is one of the most expensive problems a business can have — and one of the least visible.

1. No real-time visibility

If you have to physically count items to know what you have, you are already behind.

2. Reordering by gut feeling

This reactive approach means you are always either too late (lost sales) or too early (tied-up capital).

3. No cost tracking per item

If you do not track what each item costs you — including purchase price, shipping, handling — you cannot know your true margin.

4. Shrinkage goes unnoticed

Without a system that tracks every unit in and every unit out, you have no way to measure shrinkage.

5. No categorization strategy

Not all products are equal. Your fast-movers need frequent reordering. Your slow-movers might need promotion or discontinuation.

The real cost in Naira

• Lost sales from stockouts: ₦1.8 million per year on popular items
• Dead stock: ₦500,000 in tied-up capital
• Undetected shrinkage: ₦100,000 to ₦250,000 annually

Total potential annual loss: ₦2.4 million+

Five steps to fix it

1. Count everything once — Do a complete physical stock count as your baseline
2. Categorize your products — Separate high-volume essentials from everything else
3. Set reorder points — Base these on actual sales velocity, not guesswork
4. Go digital — Every sale, restock, and adjustment recorded automatically
5. Review weekly — Check approaching reorder points, slow-movers, and count accuracy