What is Shrinkage?

If your business carries inventory, you can’t avoid shrinkage. As the name implies, it’s when there is less physical inventory sitting on the shelves than what the inventory control system says you have.  

Shrinkage can indicate issues in the business: some nefarious (such as employee theft or vendor fraud), some careless (unreported use or disposal), some accidental (broken when stocking the shelves) and some unavoidable (perishable food products).  

The good news is that shrinkage can be managed and reduced. Some of the ways to reduce shrinkage is by keeping the store well organized, counting more frequently to have a more accurate capture of inventory and reducing over-ordering of stock. 

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