The 80/20 Inventory Velocity Rule: In almost every kirana, garments, or retail store, roughly 80% of daily cash revenue comes from just 20% of fast-moving staples—such as flour, oil, salt, milk, daily soaps, or fast-selling fabrics. Conversely, slow-moving novelty items tie up precious working capital without generating quick returns.
The Hidden Dangers of Dead Capital: Money spent on unsold stock sitting on shelves for more than 60–90 days is 'frozen money'. Dead stock gathers dust, occupies valuable shelf space, risks expiry or pest damage, and steadily erodes your ability to restock fast-selling items that regular customers ask for every day.
The Bulk Discount Trap: Wholesalers frequently offer deals like: 'Buy 10 cartons today at a 5% discount instead of 1 carton.' If it takes your shop four months to sell 10 cartons, the interest and liquidity cost on that locked-up working capital far exceeds the small discount! Buy only what your shop turns over within 10 to 20 days.
FIFO (First-In, First-Out) Shelf Discipline: When fresh inventory arrives from wholesale distributors, always stack the new boxes behind existing shelf stock. Selling older inventory first prevents expiry losses, maintains product freshness, and prevents packaging degradation in humid weather.
Weekly 15-Minute Shelf Audit: Every Monday morning, review your inventory: identify products with zero sales in the past fortnight, discount them slightly to recover cash, and reinvest the recovered money into high-velocity goods. Regular shelf audits ensure your working capital stays dynamic and productive.