How to Organize and Track Your Jewelry Inventory Like A Pro (Free Template)
The way you organize and track your inventory could be the reason your jewelry business is struggling…
Many, many years ago, when I was still running my first jewelry business, I was having major cash flow problems.
The sales were flooding in, and my business was seemingly growing, but somehow I was still barely scraping by each month.
After years of struggling, I finally hired a consultant to help me get to the bottom of my cash flow issue. What he discovered was… honestly a little embarrassing.
One of the first things he asked me to do was estimate the value of how much inventory I had on hand.
“I don’t know, maybe about 50K?” I guessed. In truth, I had no clue.
Together, we started sorting through dusty boxes of pre-made stock, unsold samples, and raw materials. It took a whole week to get through all of it.
When we added it all up, I actually had over 150K worth of dead inventory just lying around the studio.
That’s triple my original estimate! I was shocked.
Turns out all those years of impulse purchases and poor inventory management added up to create a serious problem for my business.
And the worst part – I never even realized it was an issue.
If you’re anything like I was, having 150K in cash would be far more beneficial to your jewelry business than 150K in extra inventory. So let’s talk about how you can avoid making the same mistakes I did all those years ago…
Why Inventory Tracking is Crucial to Running a Lean Jewelry Business
Before we go any further, we need to define what inventory is so that you understand what to measure.
What counts as jewelry inventory?
- Collection Samples
- Pre-made products
- ALL of your raw materials – right down the smallest components
- Scrap metal that can be traded in for money
- Packaging and shipping items
If your jewelry business is struggling, it might be because you have an inventory problem.
Inventory management is a careful balance. If you don’t have enough on hand, you won’t have anything to sell. But if you have too much, you’re essentially leaving cash to collect dust on the shelves of your studio.
It’s all about finding the perfect balance so your business can be as profitable as possible.
If you want to run a lean jewelry business – meaning a business that only has what it needs when it needs it – you have to learn how to organize and track your inventory.
Here’s how to do it…
A labeling system is a jeweler’s best friend. This may seem pretty basic, but it’s too essential to overlook.
When the orders are pouring in, and you’re working overtime, it can be tempting to toss some pieces of scrap in a ziplock baggie and trust you’ll remember what it’s for.
But then you’re moving on to the next thing, and then the next thing, and then the next thing…
Cut to two months later, you’ll find that baggie buried in the corner of your studio somewhere and have no idea what you were planning to do with it.
Put a label on every little thing, even if it seems redundant at the time. This will save you from unnecessary confusion down the line.
Consolidate Your Storage Space
Managing inventory is overwhelming when you have to physically rush all over the place.
Try to consolidate your storage space to no more than 2-3 areas of your studio. This will make it easier to conduct regular inventory evaluations without exhausting yourself.
On top of that, make sure you have a dedicated place for absolutely everything in your studio, no matter how small.
With a highly organized space, finding the materials you need will become second-nature; you won’t even have to think about it.
Not only will this free up space in your studio and improve your flow of production, but it also frees up space in your brain so you can stay focused on more important things.
Store Materials by Unit Count or Weight
The key to a highly efficient jewelry inventory system is taking inventory regularly, so you should aim to make that task as easy as possible.
Group larger items by unit to make counting a breeze. For smaller materials like jump rings and findings, you’ll need to develop a system to store them by weight. Otherwise you’ll waste a lot of precious time counting and recounting.
For example, if you know 50 beads weigh 9 grams, you can separate them into baggies by weight instead of unit count.
Don’t worry, I’ll dive into how to conduct regular inventory checks in just a minute. First we need to talk about how file folders, double-sided tape, and ice cube trays might just rock your world…
Implement Organization “Life Hacks”
Every jewelry designer’s studio is a little bit different, so find organization strategies that work for your space and workflow.
My friend Corkie Bolton runs Metalsmith Society. It’s a fantastic online community for jewelers to come together and share tips and tricks for working on the bench and improving the jewelry-making process.
Her online database has plenty of jewelry storage “life hacks” that you can use to organize your studio and keep better track of your inventory.
Track Your Inventory on a Consistent Schedule
Tracking your inventory regularly is crucial to running a lean jewelry business.
Doing so allows you to keep your accounting airtight and make accurate predictions for future inventory purchases.
A practical jewelry inventory tracking schedule should look something like this…
- Monthly – At the end of each month, take an accurate inventory count and update your spreadsheet or inventory tracking software.
- Quarterly – At the end of each quarter, do an inventory evaluation. If you have materials you haven’t used yet that aren’t in your regular production cycle, make a plan for how to use or destash those pieces.
- Annually – At the end of each year, take an in-depth, accurate inventory count and send it to your accountant so that you have everything recorded on your books for proper accounting.
This may seem like a lot, but the time and money you save with an intentional inventory tracking system will keep your jewelry business running like a well-oiled machine.
Use Data to Predict What You’ll Need
Running a lean business isn’t only about knowing the inventory you already have on hand. You also need to get a pulse on how much inventory to order and how quickly your supply chain moves.
For the most part, I recommend keeping enough on hand to produce orders while using historical data to predict what you need to stock vs. what you can order with a quick turnaround time.
Take a look at your monthly orders and shipping trends to make a demand plan and get an idea of how to strike the right balance for your business.
Have a Plan for Everything You Buy
Speaking from personal experience, this is the most difficult part of inventory management. You must have a plan for everything you buy.
I suffer from what I like to call “shiny-bright-object syndrome,” and I know I’m not the only one.
I used to buy loads of materials that inspired me without really thinking about how to create, sell, and market the finished product. That’s how I ended up with 150k of dead stock that was dragging my business down.
No more impulse purchases, m’dear!
With accurate data under your belt, you should be able to avoid accumulating too much dead inventory, and you can keep the cash flowing in your business.
Offload Dead Inventory
Even if you do everything right, never make impulse purchases, and get extremely lucky with your projections, you’ll still end up with dead stock eventually. It’s just a fact of running a product-based business.
And if you’re anything like I was, you probably already have some dead inventory lying around that needs to be de-stashed.
Listen, it never feels good to sell something at a loss, but it’s always better to sell inventory for some money than to have it taking up space and making no money.
It’s a good idea to offload dead inventory at least once per quarter. There are tons of ways you can do this, and even make a little extra cash in the process. Here are just a few ideas…
Inventory reduction strategies for finished jewelry pieces:
- Have a sample sale.
- Host a flash sale on your website for a limited amount of time.
- Host a virtual trunk show or an in-person trunk show.
- Bundle discounted old stock with your best-sellers.
- Offer a free gift with purchase on your website.
Inventory reduction strategies for raw jewelry materials:
- Use the inventory to produce limited edition pieces for discount prices.
- Participate in a local craft or art fair to de-stash old inventory.
- Sell raw materials online.
- Refine or trade in raw materials.
- Return unused materials for cash or store credit.
When you can’t get cash, donation is always a great option. Be sure to keep track of the value of your donations for your taxes at the end of the year.
Use a Jewelry Inventory Tracker
All of these jewelry inventory management strategies are effectively useless without a highly organized way to keep track of your data.
Some jewelry designers use software to track their inventory, but honestly a well-crafted spreadsheet is all you really need.
You’re in luck, because my team and I designed a free inventory tracker template made specifically for jewelry designers.
It’s my passion to demystify the jewelry industry and help designers like you build 6+ figure businesses online. This inventory tracking template is only one of the many resources we have available to you online.
If you’re feeling stuck in your business and you’re tired of throwing things at the wall to see what sticks, it might be time to bring in the experts.
In only 12 weeks, we can help you create a highly customized plan that is easy to understand and implement so you can finally start reaching your business goals.