Non-Stock Inventory: The Daily Definition
What is non-stock inventory?
Non-stock inventory refers to products that your business carries “in theory.” In other words, these are products that you don’t sell conventionally, or are used for internal purposes. This can encompass products that you sell, but do not purchase, products that you purchase but don’t resell, and products that you do purchase or resell but do not count as part of your inventory.
Distributors often use non-stock inventory in transactions that are outside the norm for their typical operations. Let’s say that you work in manufacturing, and you’re working on a custom order for one of your customers. In order to complete the project, you have to place a special order for an item per the customer’s request.
When this part arrives at your warehouse, it won’t be assigned an internal SKU in your database. However, you should still track the product as business property. By using non-stock inventory, you’re cutting out unnecessary steps and avoiding bogging down your existing inventory.
Our two cents:
Non-stock inventory is a great tactic for keeping your internal inventory under control, but it shouldn’t be abused. Having a huge amount of ono-stock inventory isn’t something to aspire towards.
If your shelves are loaded with less essential inventory, that’s a problem. It’s taking up space that would be better used for products that consistently turn a profit. When you’re using non-stock inventory, ensure that you set clear boundaries and expectations among your staff for how and when it should be used.
Keeping your inventory in check isn’t easy, but it helps if you know where to start. For a good jumping off point, take a look at our helpful hints about receiving inventory that you can use to guide your processes!