The Importance of Stock Control

by Victoria Duff Google

A retail store occasionally runs out of certain items. This happens for a number of reasons: unexpected popularity of a particular item, such as one that has attained fad appeal among schoolchildren; an unusually large purchase, such as buying up all of a store's hotdog buns for a party; or a failure by the manufacturer to make and ship on time certain items. Stock control is a way the retailer avoids running out of stock through tracking what is on hand, what has been sold and what is on order.

Customer Service

Good customer service for a retailer consists partly of having adequate supplies of what the customer wants to buy. If a store runs out of a particular product, the customer buys it somewhere else -- perhaps establishing a relationship with a competitor. Not only has the retailer lost a sale; it possibly has lost a good customer as well.


Retail inventory consists of what products are on the store shelves plus the products in boxes in the storage room. As customers deplete the stocked shelves, more stock comes out of storage to replace what has been sold. Keeping track of the inventory on hand allows the store owner or manager to know when to order additional stock of the items before they sell out.


"Shrinkage" is a term used in retail to designate any mysterious disappearance of inventory. It is derived from a starting count of inventory on the shelves and in storage. As goods are sold, the inventory should decline by the amount of sales. Sometimes, there is less inventory than expected, which normally means goods have been stolen or misplaced. Identifying missing inventory helps the retailer know to improve store security or inventory tracking procedures. Tracking sales over years also helps the retailer know how much to order of certain products at different times of the year. For example: When hot dog buns sell out at the beginning of July, the retailer can figure it is because of Fourth of July parties, and he will know to order more hot dog buns, and possibly plan a special Fourth of July promotion of buns, condiments and hot dogs.


Keeping track of goods on order allows a retailer to verify that replacement stock has been ordered. Monitoring order status alerts the retailer to possible delays in delivery in time to find another source of those goods from an alternate distributor. Manufacturers and distributors occasionally face fulfillment problems due to weather, machinery breakdown, labor strikes, unexpected demand and transportation problems. A detailed analysis of delivery times can prompt a retailer to change distributors or to figure seasonal delays into the timing of his orders. Customers don't care why a product is not available for purchase when they want it; they only know the retailer failed. A detailed system of stock control keeps the customer satisfied and the retailer in business.

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