7 ways to Minimise Inventory Storage for your Business

It’s unfortunate that businesses suffer from inventory shrinkage. It occurs in different forms with theft, loss or damage accounting for the majority of the shrinkage. It is a nightmare for business owners to absorb those lost costs and has even put some completely out of business. For current business owners, this is a problem that shouldn’t be overlooked and that should also be managed as soon as possible.

To help you avoid the threat of this unpleasant experience, we have provided some of the top ways to minimise inventory storage for your business.

Warehouse inventory

1. Keep your inventory count accurate

As easy as it sounds, many people will overcompensate if they are estimating numbers for their inventory count. This leaves margin for error and can account for missing, lost or stolen stock.

Ensure that there are processes in place to successfully monitor the count of your inventory stock. For example, by having the inventory barcoded and integrated with a supply chain management system through to your business’s point of sale (POS) software, you can track the movement of your inventory stock more accurately.

2. Take extensive measures to prevent internal theft

Internal retail theft by a business’s employees can account for up to 50% of inventory shrinkage for a business. Businesses need to take preventative action to deter the risk of inventory theft by employees. Some methods that can be implemented include:

  • Security surveillance – Installing security surveillance technology such as CCTV systems can successfully monitor your inventory stock, the staff that are responsible and any staff members that come into contact with inventory. If there are cases where inventory shrinkage occurs, the matter can be dealt with based on the surveillance process that the business has put in place.
  • ID tracking – You can increase the level of detail of your surveillance by ensuring that tracking technology that recognises who was responsible for the inventory and the inventory count at the time.
  • Increased security patrol – Sometimes the security cameras cannot catch everything. That’s why having security patrols or mobile security units can also help with deterring and catching theft in your business.

3. Take extensive measures to prevent shoplifting

Similar to deterring internal theft, shoplifting can be deterred by also using surveillance technology such as CCTV cameras and to have security patrols monitoring shoppers for any theft activity.

4. Empowering your business’s managers to prevent inventory loss

You can incentivise people within your business to prevent inventory loss. By allocating targets, responsibilities, awards and bonuses for employees minimising inventory theft, damage and loss, the business will create a win-win situation by improving employee morale and performance whilst reducing inventory shrinkage costs.

Safety and security sign
photo credit: sea turtle / Flickr

5. Continue to make employees aware that they are always being monitored

The more you make your employees aware that they are being monitored and the consequences of their actions, the more unlikely they are to engage in any theft activity with your business. Many businesses will enforce instant dismissal without pay for those that violate the business’s code of conduct when it comes to theft.

6. Secure doors to your inventory stock with alarm systems

Ensure that any doors to your inventory stock are kept closed. Ideally, the rooms that hold your inventory will have an alarm and tracking system on it to prevent theft and inventory shrinkage.

7. Review your security processes and footage regularly

You don’t want to have your business robbed right under your nose. Check CCTV footage and review security processes to prevent theft. Ensure that any bags or sacks (even garbage bags) are checked for any inventory items.


Inventory shrinkage is a serious issue that needs to be managed and prevented. Ensure that all of your teams (from supply through to point of sale) play their part and ensure that the management of your business invest in the technology and services to prevent the threat of inventory shrinkage that could affect your business.