If you make things to sell, you probably have inventory.
And by inventory, I don’t just mean finished products sitting on a shelf.
You may have:
- fabric
- beads
- paper
- blanks
- paints
- blanks waiting to be decorated
- packaging
- labels
- finished products
- partially completed projects
- seasonal supplies
- supplies you bought because they were “too good to pass up”
And somewhere in the middle of all that stuff is probably a question you’ve asked yourself at least once:
“Do I already have some of these?”
Inventory management doesn’t sound particularly exciting.
But if you’re running a handmade business, it can have a surprisingly big effect on your profits.
You don’t need a giant warehouse or complicated software.
You need to know what you have, what it’s worth, what is selling, and what you actually need to buy.
What Counts as Inventory?
The first step is understanding what you’re actually tracking.
For a maker, inventory can generally be divided into a few useful categories.
Raw materials
These are things you use to make your products.
Examples include:
- fabric
- wood
- paper
- yarn
- beads
- paint
- blanks
- findings
- embellishments
Work in progress
These are products you’ve started but haven’t finished.
This category is easy to overlook.
A half-painted sign, partially assembled jewelry piece, or unfinished journal may represent money you’ve already spent.
Finished products
These are products that are ready to sell.
This is the inventory customers actually see.
Packaging
Boxes, mailers, tissue paper, labels, bags and other shipping materials are also business supplies worth tracking.
You don’t necessarily need to count every single piece of packaging individually.
But you should have a reasonable idea of how much you have and when you’re getting low.
Why Inventory Matters to Your Profit
Here’s something that can be easy to miss.
When you buy $200 worth of supplies, you haven’t necessarily spent $200 making products.
You may have spent $200 buying inventory.
If those supplies will eventually make 40 products, the cost of those products needs to be understood over time.
This is one reason your bank account and your business profit can tell very different stories.
You can have plenty of inventory and very little cash.
Or you can have lots of cash coming in while sitting on a mountain of products that aren’t selling.
Neither situation is ideal.
Don’t Confuse Having Inventory With Having an Asset You Need More Of
Makers often fall into a very understandable trap:
Buying supplies feels productive.
You’re preparing.
You’re planning.
You’re imagining all the things you’re going to make.
But buying another 50 blanks doesn’t make your business more profitable if you still have 75 sitting in a box.
The same applies to finished products.
If you’ve made 30 of something and only sold three, making another 20 probably isn’t the answer.
Sometimes the smartest inventory decision is:
Don’t make any more.
Track Finished Products First
If inventory management feels overwhelming, don’t start by counting every bead in your craft room.
Start with your finished products.
Create a simple list containing:
| Product | Quantity | Cost to Make | Selling Price |
|---|---|---|---|
| Product A | 8 | $7 | $24 |
| Product B | 3 | $12 | $35 |
| Product C | 15 | $3 | $12 |
This immediately tells you much more than a room full of labeled bins.
You can see:
- what you have
- what you’ve invested
- what it could sell for
- which products are sitting around
That’s useful information.
Then Track Your Supplies
Once finished inventory is under control, move to your major supplies.
You don’t need to track every scrap of ribbon.
Focus on things that are:
- expensive
- used frequently
- easy to run out of
- difficult to replace
- important to your best-selling products
For example, if you make handmade signs and one particular blank is used in three of your best sellers, you absolutely want to know how many you have left.
Use a Minimum Stock Level
One of the simplest inventory tricks is to establish a minimum stock level.
Suppose you regularly use a particular blank.
You decide that when you reach:
10 blanks remaining
it’s time to consider ordering more.
You don’t necessarily need to reorder 100.
Maybe 25 is enough.
The exact number depends on how quickly you use the supply and how long it takes to get another shipment.
The point is to stop relying on:
“I think I have some somewhere.”
Your Inventory Should Reflect Your Sales
This is where inventory management becomes a business strategy rather than just organization.
Look at your sales.
If Product A sells consistently and Product B doesn’t, your inventory should eventually reflect that.
You might keep:
More materials for Product A
and
less inventory for Product B.
That sounds obvious, but makers often do the opposite.
We make what we’re excited about.
Customers don’t necessarily agree.
Your sales data is giving you information about what people actually want.
Pay attention to it.
Don’t Let Seasonal Inventory Become Permanent Inventory
Seasonal products can be great.
Christmas markets, Valentine’s Day, Mother’s Day, wedding season and other events can create excellent selling opportunities.
But seasonal inventory comes with a risk.
You don’t want to still have 40 Christmas products sitting in your storage area in March.
If a seasonal item isn’t selling, consider:
- discounting it
- bundling it
- changing the presentation
- selling it at a market
- repurposing the materials
- holding a small amount for next season
The goal isn’t to eliminate leftover inventory completely.
The goal is to avoid turning temporary inventory into permanent clutter.
Watch Your “Dead Stock”
Dead stock is inventory that has been sitting around without selling.
Maybe you made too many.
Maybe the product isn’t popular anymore.
Maybe your pricing is wrong.
Maybe customers don’t understand what it is.
Maybe you simply stopped promoting it.
Whatever the reason, dead stock ties up money.
And there’s another cost that’s easy to overlook:
space.
Your business is paying for every shelf, bin, closet and storage area that your inventory occupies.
Not literally on a monthly invoice—but in terms of space, organization and mental clutter.
Before You Make More, Ask One Question
Here’s a simple rule worth adopting:
“How many do I already have?”
Before starting a production run, check your finished inventory.
If you already have 12 ready to sell, ask yourself whether making another 12 makes sense.
Maybe it does.
Maybe you’re preparing for a large market.
But if you’re simply making more because you enjoy making the product, stop and look at the numbers first.
Making something and selling something are two different activities.
A successful maker business needs both.
Your Inventory Can Tell You What to Stop Selling
This is one of the most valuable things inventory tracking can reveal.
Suppose you’ve made a product five different times.
You have sold:
- 2 in January
- 1 in March
- 0 in April
- 1 in June
- 0 in August
Meanwhile, another product sells every week.
It may be time to ask:
Is Product A worth the time and materials?
You don’t necessarily have to discontinue it.
But perhaps it needs:
- a new price
- better photographs
- a new listing title
- different packaging
- a bundle
- a different market
- or a complete redesign
Inventory gives you evidence instead of guesswork.
Don’t Buy Supplies Just Because They’re on Sale
This one is particularly difficult for creative people.
A supply is 40% off.
It seems like a bargain.
But if you don’t use it, you didn’t save 40%.
You spent 60%.
That’s a very different thing.
Before buying a discounted supply, ask:
What products will I use this for?
If you can’t answer that, you may be buying inventory rather than buying a useful business input.
Keep a “Use First” Box
Here’s a simple physical system that can work surprisingly well.
Create a small area labeled:
USE FIRST
Put supplies or materials there that:
- you’ve had for a long time
- are seasonal
- are nearing their useful life
- you’re trying to clear out
- are leftovers from discontinued products
Then deliberately design products around those supplies.
You may be able to turn forgotten materials into products that generate cash instead of letting them sit indefinitely.
Inventory Doesn’t Have to Be Complicated
You don’t need expensive inventory software to get started.
A spreadsheet can be enough.
At minimum, track:
- product name
- SKU or product number
- quantity
- cost per item
- selling price
- date added
- quantity sold
- quantity remaining
For supplies, you can track:
- supply name
- quantity on hand
- unit cost
- supplier
- minimum stock
- reorder quantity
That’s enough information to make much better decisions.
Your Inventory Should Answer Five Questions
If your system is working properly, you should be able to answer these questions fairly quickly:
1. What do I have?
Your current inventory.
2. What is it worth?
Your cost invested in inventory.
3. What’s selling?
Your best-performing products.
4. What’s sitting?
Your slow-moving or dead stock.
5. What do I actually need to buy?
Your upcoming supply requirements.
If your inventory system can’t answer those questions, it may be more complicated than it needs to be—or not organized around the information you actually need.
Don’t Aim for a Perfect Inventory System
This is important.
Your inventory system doesn’t need to be beautiful.
It doesn’t need 37 columns.
It doesn’t need complicated formulas.
And you don’t need to spend three weekends building a color-coded spreadsheet before you make another sale.
Start simple.
Track the information that helps you make decisions.
Then improve the system as your business grows.
A simple system you actually maintain is infinitely more useful than a perfect system you abandon after two weeks.
Final Thought
Inventory is money.
Every finished product sitting on a shelf represents materials, time and effort you’ve already invested.
Every box of unused supplies represents cash you’ve already spent.
That doesn’t mean inventory is bad.
It means you should know what you’re holding and why.
The goal isn’t to have the biggest supply room.
The goal is to have the right inventory moving through your business at the right time.
Make what sells.
Buy what you need.
Watch what sits.
And don’t be afraid to stop making something when the numbers tell you it’s time.
Want an Easier Way to Track It?
Keeping track of products, quantities, costs and supplies doesn’t have to mean building your own spreadsheet from scratch.
The Crafty Marketer Inventory Tracker is designed specifically for makers who want a simple way to see what they have, what they’ve invested, and what needs attention.
Track Your Inventory →
