Reselling inventory stocktake: count the shelves, fix the sheet

The sheet says 240, the shelves say otherwise

An example seller's spreadsheet shows 240 items in stock. A count of the shelves finds 226. Somewhere among the missing fourteen are a sold item never marked, a jacket that slid behind a shelf, a return that went straight into a bin, and two items donated in a clear-out and never updated. None of that is dramatic, but every one of those gaps distorts what you think you own and what it cost.

This guide covers a reselling inventory stocktake, using IRS Publication 538's sections on perpetual inventory, physical inventory and goods that cannot be sold, plus IRS recordkeeping guidance, checked November 8, 2026. It's a practical counting method, not advice on how to value inventory for tax; ask a tax professional about that.

Why count at all

IRS Publication 538 says that if you keep a perpetual or book inventory, you must take a physical inventory at reasonable intervals and adjust the book amount to agree with the actual inventory. Whatever method you use for tax, a count is how you find out whether your records describe reality.

Step 1: Choose when and how often

Pick a date you can repeat: the end of the year is common, and many sellers also count quarterly or before a big season. Count when sales are slow and no shipments are pending, so the number stays still while you count. Pause new intake until the count is done.

Step 2: Prepare a count sheet

Export the inventory sheet's in-stock rows sorted by location. Add two blank columns: "Found" and "Note". Print it or use it on a tablet. Counting by location is faster than counting by SKU, because you walk the shelves once.

Step 3: Count shelf by shelf

Work one bin or shelf at a time:

• Read the SKU on each item and mark it found.
• Write any item without a SKU tag on a separate "unknown" list.
• Note damage, missing parts or items in the wrong bin.
• Don't fix things during the count; just record them.

Two people make it faster and more accurate: one reads, one marks.

Step 4: Reconcile the gaps

After the count, work through every unmarked row:

1. Check platform sales for that SKU; it may have sold and not been updated.
2. Check returns and the sold-item bin for items in transit.
3. Check donation and discard notes.
4. Search the space again for anything still missing.
5. Mark anything still not found as lost, with the date, and keep a note.

Then process the unknown list: match each item to a row by description and photos, or create a row.

Worked example: counting time

In this chosen example, a seller budgets 2 minutes per item for 240 items and has a 9-hour Saturday, or 540 minutes, available.

Sixty minutes may not be enough to chase fourteen gaps. Split the job: count on Saturday, reconcile on Sunday. The calculator below runs the same check with your numbers.

Step 5: Deal with items that can't be sold normally

A count usually turns up items that are damaged, stained, missing parts, out of style, or broken lots. Publication 538 describes "goods that cannot be sold" at normal prices because of damage, imperfections, shop wear, changes of style, odd or broken lots or similar causes, and says to value them at their bona fide selling price minus direct cost of disposition. For records, that means writing down what you actually do with them: sell as-is at a lower price, part out, donate, or discard, with the date. Your tax adviser can tell you how those records are used.

Step 6: Record the result

Save a dated copy of the count sheet with the found marks and notes. Update the main sheet. Write a short summary line: date, items expected, items found, items added, items lost, items written down. Over a few counts, the summary shows whether losses are shrinking.

Count the stale stock too: A stocktake is the moment to sort by date acquired and look at what hasn't sold. The buying pause guide helps decide what to do next.

Make the next count easier

• Tag every item with a SKU at intake, as the SKU guide describes.
• Mark sales in the sheet the same day.
• Keep one location per item and update it when things move.
• Put returns in a marked bin until they're inspected.

Common mistakes

• Counting while orders are still shipping.
• Fixing problems mid-count and losing your place.
• Marking items lost without checking sales and returns.
• Leaving untagged items out of the count.
• Not saving a dated copy of the result.

The shelf is the truth

Your spreadsheet is only as good as its last count. Count by location, reconcile every gap, record what you couldn't sell, and save the result with a date.