Core formulas
The formulas to keep straight
Ending inventory = beginning inventory + purchases - materials usedFinished goods available = units made - units sold - units damagedCOGS per unit = material cost + labor + packaging + allocated overheadReorder point = average weekly use x lead time weeks + safety stockWhat is the easiest free inventory system for makers?
Use a spreadsheet with five tabs: materials, finished goods, orders, suppliers, and adjustments. Keep the fields few enough that you will actually update them.
The minimum useful system answers three questions: what is on hand, what did it cost, and when do I need to reorder?
Free maker inventory spreadsheet tabs
| Tab | Required fields |
|---|---|
| Materials | SKU, name, supplier, unit, quantity, unit cost, reorder point. |
| Finished goods | SKU, product, units made, units sold, units on hand, unit cost. |
| Orders | Date, channel, SKU, quantity, price, status. |
| Suppliers | Supplier, lead time, minimum order, last price. |
| Adjustments | Date, item, quantity change, reason. |
How does inventory tracking connect to COGS?
COGS needs the cost of the items that sold. If a maker only tracks total supply purchases, profit gets muddy because supplies bought this month may be used next month.
Track cost per material unit and the quantity used per finished item. That gives each product a defensible cost before fees, shipping, ads, and profit.
Simple COGS record
| Product | Material cost | Packaging | Labor | Unit cost |
|---|---|---|---|---|
| 8 oz candle | $4.10 | $1.20 | $5.00 | $10.30 |
| Sticker sheet | $0.85 | $0.20 | $1.50 | $2.55 |
| Bracelet | $6.25 | $0.75 | $8.00 | $15.00 |
When should a maker stop using a free inventory sheet?
Upgrade when the free sheet costs more time or mistakes than software would cost. The usual signs are missed orders, stockouts, double selling, batch traceability needs, or multi-channel inventory updates.
Verified July 4, 2026, Stocksmith positions itself for small-batch product businesses with materials, batch production, inventory control, COGS, and channel sync. A spreadsheet is still better for a tiny shop that needs discipline before automation.
- You sell on more than one channel.
- You need batch or lot history.
- You reorder too late.
- You cannot calculate COGS quickly.
- You spend more than a few hours each month fixing stock counts.
Decision table
Inventory tool decision
| Shop state | Best tool | Reason |
|---|---|---|
| Under 25 SKUs | Spreadsheet | Low complexity. |
| Many raw materials | Structured sheet or software | COGS matters. |
| Multi-channel sales | Inventory software | Manual updates break. |
| Batch tracking needed | Software | Traceability needs history. |
| No records yet | Start free | Build the habit first. |
Worked examples
Examples you can compare against your own numbers
Example: reorder point for candle wax
A candle maker uses 12 pounds of wax per week. Supplier lead time is 2 weeks. Safety stock is 10 pounds.
| Average weekly use | 12 lb | From the last 8 weeks. |
|---|---|---|
| Lead time | 2 weeks | Supplier average. |
| Safety stock | 10 lb | Cushion for busy weeks. |
| Reorder point | 34 lb | 12 x 2 + 10. |
Takeaway: The maker should reorder wax when stock falls to 34 pounds, not when the shelf looks low.
Action checklist
Before you use this number in the real business
- 1Create material and finished-goods SKU lists.
- 2Enter starting quantities.
- 3Record unit costs.
- 4Set reorder points.
- 5Update stock when making and shipping products.
- 6Review COGS monthly.
Common mistakes
Mistakes that make the answer look better than reality
FAQs
Questions people ask before making the decision
Can I track inventory free?
Yes. A spreadsheet works when SKU count is small and updates are consistent. The system fails when stock moves faster than you update it.
What should handmade sellers track?
Track raw materials, finished goods, units sold, unit cost, supplier, reorder point, and adjustments. Those fields support both fulfillment and pricing.
Is inventory the same as COGS?
No. Inventory is what you have on hand. COGS is the cost of the items sold during a period.
When should I use inventory software?
Use software when multi-channel sales, batch tracking, or COGS updates become too slow or error-prone for a spreadsheet.
Sources and notes
Where the assumptions come from
Official IRS resource map for business expenses, inventory, records, depreciation, and related forms.
Official Stocksmith site stating Craftybase became Stocksmith with the same team and software.
Official Stocksmith pricing page for Indie, Business, Growth, and Craftybase Studio pricing.
FeeProofed source, calculator, and review methodology.