The Gift Shop with a Huge Inventory Problem… and a Tidy Bathroom to Boot!
But don’t worry, this is a common place for businesses to find themselves and it can happen so slowly without you even realizing it. Often businesses store their stock in work rooms, such as offices or storerooms and before you know it, these areas become the stockroom. Then when peak season arrives and more stock is required, other rooms start to get taken over. This can lead to cluttered and disorganized work areas, decreased productivity as well as added costs to the business. It’s not just the cost of physical storage, but the stress and discomfort of working in a cluttered and untidy environment.
The problem with inventory overflow is not the space – it is your relationship with the space that you are holding. What are you holding? Why are you holding it? Does it deserve the square footage that it is consuming?
Step 1 Audit your stock – ruthlessly
The best place to start is to work out what you currently hold and go through it item by item to clear out any excess stock, packaging materials, obsolete stock and even the odd bit of trash that’s been accumulating in the back of the storage room. Doing a stock audit is a painful task that you’d rather be putting off but it’s worth it in the end to clear out the rubbish. I guarantee you’ll find lots of things that you’ve long forgotten that you even had, you’ll discover you have lots of duplicate stock, and lots of other stock that has been lingering for over a year or so and never seems to get any action. Many small businesses are able to clear out 15% to 30% of their usable space in the stock that has been clogging up the shelves and storage areas.
Things you have forgotten you had: Duplicate stock: Stock that has not moved in over a year: Packaging materials (even if they have been paid for in full) that can be consolidated in a storage room somewhere and then forgotten until needed. It is not uncommon to find that up to 30% of a business’s stock can be cleared from its storage rooms and bring back very useable space. Some businesses have reported finding up to 15% of their space being used to hold duplicate stock of things that are no longer required.
Ask yourself:
- Is this product still active, or am I holding it out of optimism?
- Do I have excess raw materials I could return to a supplier?
- What’s been sitting in that corner since before COVID?
- Could any of this be sold at a discount just to free up room?
It is possible that your inventory problem is actually a decision-avoidance in disguise. That is to say, your problem with your inventory in your storage is harder to fix than your inventory problem.
The real cost of doing nothing
There are many problems with stock that is scattered about or disorganized, often not immediately apparent. Inventory that is scattered about can mean that your employees’ time is wasted looking for items, damaged stock causes you to lose money as it is written off as lost or saleable as second hand, and, worst of all, customers see the state of your disorganized stockroom and form a poor impression of you.
In the first instance this would mean additional rental, and potentially increased utility costs (for example, if you need to heat and cool a larger space) and cleaning charges (if the extra space is not to be used for storage then it is likely to be your responsibility to clean it). But the biggest expense of all would be the long term implications of signing for a larger space. Most leases are for a number of years and so committing to a larger space than you need for the majority of the year in order to have somewhere to put overflow in February would be folly. The building would sit there 11 months of the year, incurring rent every year, and doing nothing to help you in the one month when you actually needed it.
So what actually works?
Affordable offsite options that actually make sense
For companies that require to hold excess stock temporarily, storing excess stock offsite is generally going to cost less than renting a larger commercial space to hold excess stock. There are many examples of the type of stock that would be stored offsite for seasonal reasons. These include, but are not limited to: Christmas decorations, yard maintenance equipment during the wet winter months, large volumes of ingredients for food manufacturing. There are many examples of stock that would be perfect to hold offsite for excess periods of time. The benefits of storing excess stock offsite as opposed to excess stock in a larger commercial space for temporary reasons include: the stock can be held offsite on a month to month basis, therefore companies are not locked into a long lease with a larger commercial space for a period of time then required.
Using storage units to hold excess amounts of stock offer affordable off-site storage space that can be used on a flexible month-to-month access basis. Most business find that storage units offer the most cost effective means of storing excess stock, opposed to having to take on a larger commercial lease in a commercial storage solution that will sit idle for most of the year. So long as the storage units are being used for what they were designed for, to store stock and then to access that stock as and when required, the space will ‘melt away’ as required, and your business will not be left with excess amounts of idle space that can then be filled with other items that are no longer required in your own warehouse or storage solution.
Here is a rough comparison between using a Commercial Warehouse, a Storage Facility and renting additional Commercial Space:
| Storage option | Flexibility | Cost level | Best suited for |
| Larger commercial lease | Low (long contracts) | High | Businesses with consistent, permanent growth |
| Self storage unit | High (monthly terms) | Low to medium | Seasonal overflow, equipment, archive boxes |
| Third-party warehousing | Medium | Medium to high | E-commerce businesses with fulfilment needs |
| Sharing space with another business | Variable | Low | Businesses with a trusted local network |
(That last option gets a lot of less attention than it deserves. The office of a tax accountant will be quiet in the Summer and the storage requirements of a Christmas retailer could possibly be housed in the back of their shop in the off season.)
Organise what you keep, wherever you keep it
More space without a system is just more space to fill. As a general rule, people treat storage solutions like landfills within 3 months if the habits haven’t changed. This is the most frustrating thing to watch.
Here are a few things that have worked for my clients:
- Label everything. Sounds obvious. Most people don’t do it properly, or they do it once and stop.
- Group stock by season or campaign, not just by product type — organise it the way you’ll retrieve it, not the way a catalogue would.
- Keep a simple spreadsheet of what’s offsite so your team isn’t guessing, phoning around, or worse, reordering stock you already own.
- Set a review date, quarterly tends to work well, to reassess what’s in storage, what can return, and what’s quietly become dead weight.
See also: Building a Business That Customers Love
One last thought
Also note that if your systems are a shambles, then no matter how much space you have, the space will be a disaster. Get a grip on the space you have, work out how much space you need for the amount of inventory you hold and then look for some flexible offsite storage solutions when your stock exceeds the space you have. Your bathroom will thank you.
Your bathroom will thank you.
