Creating categories for your stock/inventory is a good way to keep track of what you have. This means creating a category in which the products that you sell belong to.  This is a good way of identifying products and helps you search for them quicker and easier.

Step by Step:

1.  Head to Manager > Categories > Product Categories > Add 
   
   
   
   
2. Put in the name of your category (and a description if needs be). And hit save.
   
   
   
   
3. Next, head to Manager > Stock/Inventory > Double click on your product
4. Once in here, type in the name of the category and hit save.
   
   
   
   
5. Now when you are running reports or searching for inventory you can easily search by category.