Common Inventory Mistakes You Should Leave Behind in 2025

As the end of 2025 rapidly approaches, your product business is knee deep in the holiday shopping season. 

You’re working hard to make your customers happy so Q4 is a resounding (profitable) success, but a niggling worry that you may be working too hard as you count pallets in the warehouse or enter figures into QuickBooks Online is keeping you up at night.

And it should!

Relying on manual processes makes you work harder, not smarter. Without modern technology, inventory mistakes are inevitable, and you may not even be aware of them until they bite you in the bottom line.

Sounds painful but have no fear! This guide will look at common inventory management mistakes and show you how Cin7 can help you correct them before they even happen.

The Cost of Outdated Practices and the Common Mistakes to Leave Behind

Inventory mistakes will cost you in the short term. Even worse, they compound over time. 

That single typo where you entered “200” instead of “20”? It doesn’t just throw off one order. It triggers overstocking, ties up cash flow, creates fulfillment chaos, and eventually erodes customer trust. One small data entry error can snowball into thousands of dollars in losses and operational nightmares. And your customers feel the impact first!

To avoid these mistakes, you need to know what they are, so here are the top nine inventory management mistakes for product businesses like yours (and how to avoid them with Cin7).

Mistake #1: Manual Spreadsheet Management

If you’re one of the 26% of businesses Gartner says is using spreadsheets to manage their daily inventory operations (and/or part of the 41% using other manual methods), then you’re struggling with some major challenges, like the data entry issues we just addressed. 

In addition to being error prone, spreadsheets can’t give you real-time visibility into your inventory and trying to control the different versions of your spreadsheet is a nightmare. Also a nightmare? Your inability to scale because simple spreadsheets are not designed to handle multi-channel complexity. 

Mistake #2: Reactive Reordering

Ever experienced a stockout? Not only were you unable to provide your customers with a desired product, but you also had to do an emergency order…at a premium price. The additional cost for reactive reordering, the potentially lost sales (not all customers will wait!), and the trust issues stemming from your lack of inventory all kill momentum and leave you scratching your head as to how it happened in the first place.

Mistake #3: Ignoring Dead Stock/Overstock

The answer to running out of stock is to ensure you have more than you need, right? Sort of. Keeping safety stock (enough to meet anticipated surges in demand) on hand is good but chronically overflowing your shelves is a recipe for disaster.

With too much inventory, you’re:

• Tying up cash with slow-moving inventory
• Marking down prices
• Paying storage costs

Encouraging overstocking or ignoring dead stock that comes from poor forecasting (e.g., using your gut or not identifying trends early) drains your profit and your energy—it’s a lose-lose situation.

Mistake #4: Single-Channel Thinking

For today’s product businesses, single-channel thinking is a no-go. While operating with only one sales channel may have worked in years past, customers now demand multiple sales channels for flexible shopping options.

With multi-channel operations, you can expect more sales and happier customers. Keep in mind that these benefits are only possible when your inventory is synchronized across all your sales channels and you’re catching any overselling and order cancellations before they happen through diligent inventory monitoring.

But what if you can’t shake the single-channel mindset? Then the benefits are just a dream.  

Mistake #5: Flying Blind on Metrics (or Using it Too Late)

Tracking metrics may sound like an enterprise-level thing to do, but it’s an essential task for any size business. Metrics provide the information you need to make proactive, not reactive, decisions (remember our reactive reordering mistake?).

Let’s say, for instance, you’re not tracking your inventory turnover. What happens? You have no clue what stock is moving and what stock is standing still, and because you don’t know, you may be tying up cash in holding costs and creating an unoptimized inventory environment. 

Let’s say, however, that you decide to review your metrics reports after problems occur. Too little, too late. You’re missing demand patterns and seasonal shifts, and this missing leads to ordering incorrectly, crushing your profit margins in the process.

Mistake #6: Poor Supplier Communication

As a product business, your suppliers play a key role in your success, but unless they’re psychics, they can’t read your mind. What does this mean? It means that without clear communication from you, they won’t know what supplies you need, nor when you need them. 

Additionally, if you provide inconsistent lead times, you’ll get inconsistent deliveries as well as supply chain disruptions due to a lack of coordination on your part. It’s a surefire way to damage vendor relationships and torpedo customer satisfaction.

Mistake #7: No Returns Strategy

If there’s one thing you can count on as a product business, it’s returns. A study by the National Retail Federation (NRF) and Happy Returns (a UPS company) projected that $890 billion of goods sold in 2024 would be returned, which adds up to 16.9% of annual sales.

Now imagine that you don’t have a returns strategy in place to manage the portion of returns coming your way, or if you do, it’s an inefficient process. You don’t have to use your imagination to know that your customers will not be thrilled. You won’t be either when you find out that your returned items are in inventory limbo and that you’ve lost opportunities to resell or refurbish your products so that you can recoup some of your losses. 

Mistake #8: Disjointed Systems and Poor Visibility

Working with disjointed systems will put a major glitch in your inventory management game. When sales, purchasing, and accounting tools don’t talk to each other, errors multiply, just like they do with spreadsheets. In addition to poor inventory visibility, you’ll experience a disconnect between stock levels and cash flow, your COGS calculations will be inaccurate, and you’ll make poor purchasing decisions.

Mistake #9: Failing to Plan for Seasonality and Growth

Finally, not taking seasonal spikes and your growth (due to new channels and markets) into consideration when managing your inventory can result in inventory chaos. Underestimating how much you need? Stockouts. Overestimating? Wasted stock. 

This final mistake—along with the eight prior—is why you need to adjust your thinking as you head into the New Year. 

The 2026 Mindset Shift

The inventory management mistakes you may have been making in 2025 will hold you back in 2026, which means it’s time to make a change.

Instead of being reactive, you need to be predictive. Those siloed systems you’ve been hanging on to? Replace them with a modern, integrated solution, like Cin7, which can take you from operating on gut feelings to making data-driven decisions and from surviving to thriving. 

That’s exactly what happened to Cin7 customer Brain Dead. Brain Dead, an e-commerce store that sells graphic-led apparel, homeware, accessories, and collaborations, started small, and when their creative and authentic brand flourished, they were thrilled. But they also struggled with managing their growing inventory using Excel spreadsheets. 

“We had a drive full of shared Excel sheets. They were clunky, not easy to use, and really easy to break,” says Amanda, Brain Dead’s logistics manager. Fortunately, the Brain Dead team reached out to Cin7 for help, and everything changed.

“Once we got Cin7 started, it immediately improved our operations,” Amanda says. 

Specifically, Brain Dead:

• Eliminated its spreadsheets, improved inventory accuracy, reduced errors, and found items 3PLs had lost
• Established warehouses in the U.S., UK, EU (Netherlands), and Hong Kong, enabling them to offer faster shipping at lower costs
• Integrated one of their brick-and-mortar stores with Cin7, allowing orders from Shopify to flow smoothly into Cin7
• Automated processes, freeing senior staff to focus on strategic decisions based on real data

“Our planning department loves Cin7 because they can know how many [products] we have, what we’ve sold recently, and how well it sold,” says Amanda. “There is a t-shirt color that we just don’t do anymore because it always did poorly. And we knew that because of Cin7.”

Brain Dead’s inspiring Cin7 customer success story perfectly illustrates how Cin7’s connected inventory management software (IMS) solves the common inventory mistakes product businesses make. As Amanda says, “We wouldn’t have been able to expand globally without Cin7.”

If you request a free demo today, you’ll learn for yourself how Cin7 provides all you need to succeed, including real-time inventory visibility, intelligent demand forecasting (with Cin7 ForesightAI), dead stock detection and analytics, and multi-channel synchronization. And our comprehensive reporting and KPIs, supplier and purchase order management, integrated returns processing, and connected financial systems will help you kick your inventory mistakes to the curb, making 2026 (and every year thereafter) one to celebrate.