The Importance of an Inventory: 5 Reasons Why Any Business Needs Regular Inventory Counts

retail inventory

You may have been putting off your first inventory count—or even questioning whether you need one at all. We hope this article will re-motivate you! Whether your business is small or large, it pays—literally—to complete regular inventories. By completing regular inventories and gaining valuable insights into your store or warehouse, you'll discover new ways to improve inventory control, reduce loss, and increase profits. Let us show you why an inventory count is integral to any business.

What Are Inventories in Retail?

Inventories in retail refer to the total quantity of goods and materials a business holds for the purpose of resale. An inventory count is the process of physically counting and verifying these items—whether they are in-store, in the stockroom, or in a warehouse. This ensures that the actual inventory matches what is recorded in the business’s system.

Inventory counts can vary in frequency depending on the type and size of the business. Some businesses conduct them once or twice a year, while others count quarterly or even monthly.

Discrepancies between your physical inventory and your records can help uncover issues such as theft, damage, or incorrect deliveries. Regular inventory counts enable you to address these issues early and implement better inventory management practices, which leads to greater profitability and operational efficiency.


5 Reasons Why Any Business Needs Regular Inventory Counts

1. Uncover Theft and Identify Inventory Shrinkage Issues
In the retail world, theft is an unfortunate reality that will always affect your inventory numbers. Shoplifting and internal theft can cause discrepancies between expected and actual stock. Regular inventory counts help detect when a security review is needed and can act as a deterrent to dishonest behavior. These counts can also expose problems such as damaged inventory, missing or unprocessed orders, and poor inventory control procedures.

2. Ensure Business Targets Are Achieved
Inventory discrepancies don’t just impact your stock—they affect your financial figures. Catching these issues early through a regular inventory count means you can make timely adjustments and stay on track to meet your financial goals, rather than discovering shortfalls at year-end when it’s too late to take corrective action.

3. Determine Product Performance
Inventory counts can reveal which products are selling well and which are not. If large volumes of a product have been sitting on the shelves, it may indicate weak sales, prompting you to consider discounting or repositioning the product in-store. Conversely, low inventory levels of a particular product might mean strong sales or an effective display strategy.

4. Maximise the Inventory Ordering Process
As previously mentioned, inventory counts highlight shortages you might not have been aware of. This helps prompt reorders of high-performing products. In some cases, your system may show that a pallet of goods is in stock, only for the inventory count to reveal that it was never delivered, damaged in transit, or even stolen. Regular inventories ensure your records reflect the true status of your stock.

5. Strengthen Your Pricing Strategies
Inventory counts are an ideal time to analyze your sales and profitability. Understanding which products are flying off the shelves—and which are not—gives you the data needed to adjust your pricing strategy. This insight enables you to maximize margins, reduce unnecessary markdowns, and drive greater profitability.


In Summary:
Regular inventory counts are essential for effective inventory control and business performance. They help reduce shrinkage, inform smarter purchasing decisions, and ensure financial accuracy—all while giving you better control over your pricing and product performance.

Don’t wait—make inventory counting a routine part of your business success.