7 Craft Store Inventory Best Practices (+  Must-Have Tools)

Are you still tracking your craft store inventory with spreadsheets, handwritten notes, or that mental list you swear you'll organize "someday"? 

Are you still trying to track how many yards are left on each fabric bolt with sticky notes? Do you find out you're sold out of a popular yarn color only when a customer asks for it?

You’re not alone.

You started a craft store because of your love for the work, and so far, you’ve managed to make inventory work for you. But the manual systems that got you started will become one of your biggest headaches as you grow. 

If you feel like you’re spending more time counting inventory than helping customers, it’s time to make a change. 

Consider this post the first step in your journey to better craft store inventory management. We’ll cover the best practices and tools you need to turn your inventory processes into a competitive advantage for your business. 

Understanding Craft Store Inventory Fundamentals 

Managing craft store inventory isn’t like managing inventory at most retail stores. Most retailers deal in straightforward units, but craft stores have to consider fractional measurements and endless variations of colors, styles, and individual units. 

You have to simultaneously manage selling fabric by the yard, beads by weight or count, and paint by the ounce. A single bolt of fabric might start at 20 yards and get sold 3.75 or 4.5 yards at a time. 

These measurements are next to impossible to track accurately with a basic retail system, which is why so many craft store owners resort to manual tracking and guesswork. 

Crafting is also an incredibly seasonal business. Halloween fabrics or Christmas beads are bestsellers one day and completely dead stock the next. Your inventory needs shift dramatically throughout the year, making it both challenging to track and essential to get that tracking right. 

Related Read: Craft Store Accounting 101: 11 Tips & Tools

With these challenges in mind, let’s walk through the best practices and tools you need to get craft store inventory right for your business.

1. Categorize Materials by Usage and Measurement Type

Your inventory challenges are unique. You sell fabric by the yard but receive it by the bolt, yarn by the ounce but order it by the case, and beads by weight, while customers buy by the project. Stop trying to fit craft supplies into standard retail categories — it doesn't work.

Instead, organize your inventory around the ways in which your items are actually measured and sold.

Create primary groups for materials sold by length, weight, volume, and piece count. Then, within each measurement category, you can further segment your inventory by project type or skill level for easier tracking and sorting.

Related Read: Managing a Craft Store: 7 Tips & Tools

For example, separate beginner-friendly acrylic paints from professional-grade oils, or group wedding-themed supplies separately from everyday crafting materials. 

When you implement SKU systems that incorporate these categories, you make it easier to spot trends and identify which combinations sell best.

2. Implement Real-Time Stock Tracking

One of the flaws of manual inventory tracking is that you’ll never keep your counts up to date using that method. 

Instead, you need to implement a real-time tracking system where your system updates automatically with every transaction instead of just updating whenever you get around to doing another manual count.

For example, when you sell 2.5 yards of fabric, your system should show 7.5 yards remaining, not just "1 unit sold.”

Real-time inventory is important for most retailers, but it’s extra important in craft stores because running out of a particular color can kill a sale entirely. 

Crafters often need exact matches for their projects, so “close enough” doesn’t cut it. When you track craft business inventory in real time, you’ll always know when you’re running low on a bestseller so you can restock before you lose any sales. 

3. Master Seasonal Inventory Planning

Craft stores experience some dramatic seasonal swings. When a parade of holidays represents a massive portion of your sales throughout the year, understanding the patterns is critical for your business’ survival. 

The first step to success with seasonal planning is to check out your sales data from previous years. Explore seasonal shifts and patterns and see where different product categories peak and crash throughout the year. 

Related Read: Retail Marketing Strategies and Ideas to Grow Your Business

Next, you’ll want to create a seasonal buying calendar that maps out when to increase orders for holiday supplies and when to start clearance pricing to move remaining stock before it becomes dead stock. 

• Order Christmas supplies in August, not October. Late orders mean empty shelves during peak sales.
• Start clearance pricing on November 26th. Every day you wait cuts your recovery percentage.
• Plan for the January crash. Reduce staff hours, and focus on setting up for Valentine's Day.

Finally, be sure to build relationships with suppliers who understand seasonal fluctuations and can accommodate flexible ordering schedules. Some vendors offer extended payment terms for seasonal orders, letting you stock up before peak demand without crushing your cash flow. 

4. Optimize Storage and Organization Systems

Your craft supplies storage system directly impacts your accuracy and efficiency as a store. Your inventory comes in every shape and size imaginable, so you need to plan your storage to accommodate this variety while keeping everything organized and easily accessible. 

Create a storage hierarchy that mirrors the categorization system we covered in our first practice. 

Use clear, labeled containers for small items like beads, buttons, and findings, and install proper shelving for fabric bolts. The best shelving for these items will prevent damage and make selection and browsing easier for customers and staff.  

Related Read: 7 Art and Craft Store Design Ideas You Need To Try

You should also designate specific receiving and processing areas where new inventory gets checked in, priced, and organized before hitting the sales floor. 

When everything has a designated place and clear labeling, cycle counts become faster and more accurate, and staff can locate items quickly instead of going on a wild goose chase every time they enter your stock room. 

5. Track Supplier Performance and Lead Times

If you want to optimize your craft store inventory processes, you can’t afford to work with unreliable vendors. You should track your suppliers’ performance and ensure your business partners are setting you up for success.

Some key performance metrics to track include:

• Delivery times
• Order accuracy
• Product quality
• Responsiveness to issues

Be sure to monitor cost fluctuations across craft store suppliers. Tracking this data over time will help you identify the best deals and negotiate better pricing. Many craft suppliers offer volume discounts or early-pay terms that impact your margins.

Finally, remember not to become over-reliant on any one supplier. Diversifying your suppliers can help you find the best deals and avoid stockouts if one of your suppliers has a delay or shortage. 

6. Establish Accurate Cost Tracking Methods

Do you really know what your inventory costs? Most craft store owners track wholesale price but miss the real cost killers: shrinkage from measurement errors, returns on cut materials you can't resell, and dead stock from seasonal buying mistakes.

Our sixth best practice is to calculate costs, including all the relevant factors: wholesale price, shipping, handling fees, processing time, and any prep work needed to get items shelf-ready.

Related Read: How To Manage Hobby Store Inventory: 7 Tips & Tools

Track shrinkage rates by product category because some craft supplies are more prone to damage, theft, or measurement errors than others. Small items like beads and findings have higher shrinkage rates than fabric bolts, for example. You’ll want to factor your shrinkage rates into your cost tracking processes.

When you track your costs in this comprehensive way, you can make better pricing decisions based on real data. 

7. Integrate Online and In-Store Inventory

Running separate inventory systems for your physical store and online sales is a recipe for disorganization and frustration.

Instead, implement a unified inventory management system where any sale automatically updates your inventory listings for your e-commerce craft store, regardless of whether the sale was online or in-store. 

Real-time synchronization prevents the embarrassing scenario where you sell the last five yards of popular fabric online, but a customer is standing in your store buying three yards of the same material. It also eliminates the manual work of constantly updating online listings based on in-store sales.

Don't try to sell everything everywhere. Some items work online, while others need to stay in-store, where customers can touch and see true colors.

5 Must-Have Tools for Craft Store Inventory

Implementing these seven best practices can help you improve your craft store inventory processes, but before you can get started, you need the right tools. 

There are five key tools every craft store needs to master their inventory management:

• Specialized POS system: Handle fractional measurements, product variations, and kit building for project bundles.
• Barcode scanners: Speed up receiving, counting, and sales processing with barcode inventory systems.
• Inventory management software: Automated reordering, supplier tracking, and seasonal planning capabilities.
• Mobile inventory apps: Conduct cycle counts and check stock levels from anywhere in your store.
• Analytics and reporting tools: Identify trends, spot slow movers, and optimize reorder timing.

The best news is, when you plan things the right way, you don’t have to invest in five separate tools; you just need the right one.

Rain POS integrates all these essential tools into one platform built specifically for craft retailers. 

Our system includes integrated barcode scanning, real-time inventory updates across your website and store, mobile access for anywhere management, and craft-specific features like kit building and supplier connections with vendors like Notions Marketing. 

We also offer a built-in analytics dashboard, giving you all the data you need at the click of a button.

Schedule a demo of Rain POS to learn more. 

Transform Your Craft Store Inventory Management

Using these tips and tools, you can make your craft store inventory processes faster and more accurate. But remember, effective craft store inventory management isn’t a one-time setup. 

You’ll need to engage with your inventory processes as an ongoing practice that evolves with your business and customers. 

The seven best practices we’ve covered in this post can provide you with a solid foundation for success, but the key to mastering inventory management starts with investing in the right tools. 

When you invest in an all-in-one point of sale system designed for craft retailers, you can spend less time on manual processes and more time focusing on growing your store. 

Ready to streamline your craft store inventory? Build and price your ideal POS solution with Rain POS today.