How to Keep Inventory for Your Handmade Business, The Easy Way

Stumped about how to keep inventory for your crafty company?  Make it really simple with an organized plan for your handmade business!  Using a spreadsheet or program can also help you stay current on stock levels through the year.  Here are some tips to establish a record-keeping system and prevent year-end panic when inventory time rolls around again.

Develop a System

Starting at the beginning of the year (if possible), create a system to keep inventory for both finished goods (completed products) and raw materials (the supplies from which you make your products).  I have found that using a binder and spreadsheet system is the easiest method, but there are also software programs for this purpose. 

When beginning, you will have to do some counting to determine quantities, but you have to do that anyway for yearly inventory.  Just enter the starting item quantity with the date you begin to keep inventory (and use that same starting date for the other finished items).

For example, I created a simple Excel spreadsheet template that can be used for every finished item.  It has columns labeled with “Date” and then every possible action for an item: Date, Made, Ordered, Consigned, Total, Material Cost, Notes.

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You can also add columns for other details, such as Price Point, Item Number, Quantity, Craft Show Sale, Discounts, depending on your own needs.  You can then manually enter item info in each horizontal row as the year progresses.

Inventory sheet example

For my finished goods, I printed a separate page for every item, and every color or variation of that item if I will make more than one.  If your handmade business also makes one-of-a-kind items, record these on a separate page for later reference.  The same kind of system can also be used to record raw material usage.  Just change the column headings to reflect measurements and other ways of counting supplies (feet, yards, cost, etc.). 

If you use IndieMade to manage your store, keeping track of how many items you have listed in your store is even easier, because as your products sell your stock level is adjusted automatically! Check out this page of our handbook for more details.

Keep It Updated

Don’t slack on maintaining your inventory system throughout the year.  It’s designed to help you know exactly how many of any particular item you have in stock at any given time.  Also, record raw material usage and purchases, so that you know when to re-order supplies.

Extra tip: Streamlining your inventory makes it really easy to re-list items online after they sell. No more digging through products to check whether you have one left!

At Year’s End

At the very end of each year, you'll need to count inventory and material costs for both raw materials and finished goods for accounting purposes.  Using the numbers from your inventory system is much easier than counting everything by hand! 

Now that you know how to manage and keep inventory for your handmade business, the beginning of every year will be much less stressful.  This is my preferred method of inventory, but you may have to develop your own that works for you.  Find what works best for your small business, and you'll be more likely to maintain a system.  Consult with your accountant or tax preparer for more details about what you need to provide at tax time.

Rebecca George is a certified Etsy educator and owner of women's fashion and accessory company Purple and Lime.

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