I remember standing in our makeshift warehouse at 3 AM during my first real peak season, shivering and holding a clipboard. We had just hit a staggering 5.3x return spike during the BFCM weekend, and our physical inventory was completely detached from what our Shopify store said we had. We were bleeding cash because we couldn't fulfill new orders while thousands of units sat in unopened return boxes, invisible to our system. My entire operation hinged on a single, massive spreadsheet that only two people truly understood how not to break. It’s a rite of passage for every DTC operator: the moment you realize your trusty inventory tracking sheet is no longer a tool for organization, but a single point of failure that could tank your customer experience.
The Humble Beginnings: Why We Start with a Spreadsheet for Inventory
When you launch a brand, you don't need an enterprise resource planning (ERP) system. You need sales. And to manage the few SKUs you have, a simple spreadsheet for inventory is perfect. It’s low cost, highly customizable, and you probably already know how to use it.
An inventory sheet gives you that immediate dopamine hit of control. You feel like you have a handle on your physical goods. Whether you use an excel inventory template or build your own, the premise is simple: stuff comes in, stuff goes out, and you update the cells in between.
But here’s where ops breaks: the physical world is messier than rows and columns. A spreadsheet assumes a linear flow of goods. It doesn't account for the forklift driver putting a pallet in the wrong rack, or the three units that "fell off the truck." I’m of the opinion that a spreadsheet is necessary to understand your business logic initially, but dangerous to rely on once you pass $1M in revenue.
Setting Up Your Digital Warehouse: How to Track Inventory in Google Sheets
If you are committed to the manual route for now, you need to set it up correctly. Learning how to track inventory in google sheets starts with defining your "source of truth" columns. Don't overcomplicate it early on.
Your google sheets inventory tracking template needs these core elements at a minimum:
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SKU (Stock Keeping Unit): The unique alphanumeric identifier. Don't rely on product names; they change.
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Product Description: So humans know what the SKU is.
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Location/Bin: Where is it physically? (e.g., Aisle 4, Shelf B).
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Quantity on Hand: What is physically in the building right now?
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Quantity Committed: What has been sold but not yet shipped?
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Reorder Point: The level at which you need to buy more.
Now the logistics math that matters: Your "Available to Sell" is not your "Quantity on Hand." It is "Quantity on Hand" minus "Quantity Committed." If your sheet doesn't calculate this automatically, you will oversell during a rush. I recall a failure case where a brand ran a flash sale and oversold their hero unit by 400 items because their sheet only tracked on-hand counts, ignoring pending orders. The resulting refund backlog took two weeks to clear and tanked their Trustpilot score.
The Google Sheets Advantage (and Trap)
There is a reason google sheets inventory tracking has overtaken Excel for many modern brands: collaboration. You don't have to email a file back and forth named "Inventory_FINAL_v12_ACTUALLYFINAL.xlsx".
Knowing how to use google sheets to track inventory means leveraging real-time updates. Your warehouse manager can update stock levels on an iPad while your procurement manager in a different state sees the changes instantly.
(Parenthetically, the downside of real-time collaboration is that it’s terrifyingly easy for an intern to accidentally delete 500 rows of data if you don't protect your ranges properly).
Excel vs. Google Sheets: Choosing Your Path
While I prefer the cloud-native aspect of Google Sheets, the classic excel inventory template still has its place. Excel can handle much larger datasets before it starts to lag, which is crucial if you have a massive SKU count.
However, the static nature of an inventory template in Excel creates version control nightmares. If two people update the sheet at the same time and save different versions, your inventory accuracy just evaporated. If you are asking how to set up an inventory tracking google sheet versus Excel, choose Sheets for agility and teams, and choose Excel for massive, complex data crunching that one person manages.
The Breaking Point: When the Sheet Isn't Enough
You will know when your inventory tracking spreadsheet is failing you. It usually happens during a peak event.
We worked with a brand that was manually updating their sheet once a day at 5 PM. During a summer sale, they sold out of their beach towels by noon. Because the sheet hadn't been updated, their Shopify store kept selling them until 5 PM. They had to send 1,500 "we're sorry" emails.
This is when you graduate to real tools. You need your e-commerce platform to talk directly to a WMS (Warehouse Management System) like ShipBob for fulfillment, and perhaps a tool like Narvar for post-purchase tracking. These tools replace manual entry with API connections. Your spreadsheet should eventually become a tool for financial analysis, not operational execution. For a deeper dive into operational strategy, check out our brand hub
The Hidden Destroyer of Spreadsheets: Returns
This is the silent killer of inventory accuracy. Most operators know how to fill out pathfinder society inventory tracking sheet (okay, maybe not that specific niche example, but a basic sheet) for outbound sales. Inbound returns are a different beast.
When a return happens, your spreadsheet says you have zero units. But you might actually have 50 sitting on a loading dock in un-opened FedEx bags. They are invisible inventory.
I remember analyzing a brand's operations where they were spending $27 in total processing costs (shipping, labor, repackaging) to restock an item with a resale value of only $19. Their spreadsheet didn't capture these costs; it just showed the inventory count going back up eventually.
How Closo Solves Returns and Fixes Your Count
This is where the traditional inventory tracking sheet model completely breaks down. You cannot manually track high-velocity returns accurately in a spreadsheet without massive labor costs.
How Closo solves returns is by decentralizing the process and keeping the "mess" out of your main inventory sheet until it's resolved.
We route eligible returns locally instead of sending everything back to the warehouse — cutting return cost from ~$35 to ~$5 and speeding refunds.
By using localized return hubs, we intercept the inventory. Instead of your main warehouse team having to receive, inspect, and update the spreadsheet for every single return, Closo's network handles it. You get a clean data feed of what is available for resale in local markets, keeping your primary inventory count pristine and focused on outbound fulfillment.
Conclusion: Respect the Sheet, But Know When to Quit It
The inventory tracking sheet is a vital part of DTC history. It’s how most of us started. It forces you to understand the nuts and bolts of your supply chain. But do not let nostalgia keep you using a tool that is hurting your business.
Honest assessment: If you are spending more time fixing your spreadsheet than analyzing what it tells you, it’s time to move on. The future of inventory management isn't rows and columns; it's real-time data flows between decentralized nodes.
If you are ready to move beyond manual tracking—especially for the chaotic world of returns—it’s time to look at smarter solutions.
Operators always ask me... (FAQ)
Common question I see: How often should I update my inventory tracking sheet?
If you are high-volume, you shouldn't be updating it manually at all; an API should. If you are low-volume, you must update it immediately as physical movements happen. Don't wait until the end of the day.
Common question I see: What about niche tracking, like a Pathfinder Society inventory tracking sheet?
While that specific example is for a tabletop game, the principles of tracking assets (potions vs. t-shirts) are the same: accuracy, location, and quantity. The difference is the stakes—losing a virtual sword is annoying; losing real inventory bankrupts your business
