Inventory Management in Shopify: How to Keep Track of Your Inventory

1. How does inventory management work in Shopify?
2. What are the advantages and disadvantages of inventory management in Shopify?
3. Step-by-step guide: How to set up Shopify Inventory Management?
4. 5 Tips for Optimizing Your Stock with Shopify
5. Which software can be used for warehouse management with Shopify?
6. Which apps are suitable for inventory management with Shopify?

Your inventory is constantly changing. Every day there are new sales, returns, shipments, damages and even thefts - which affect your stock levels. That's why inventory management has become one of the core tasks of a retail or wholesale company. With it, you not only increase your revenues by investing in top-selling products. You also save resources by maximizing the efficiency of your warehouses. How you can take your warehouse management to a new level with Shopify is what you will learn in this article.

How does inventory management work in Shopify?

In Shopify, you can track and manage your inventory in the "Inventory" section. We'll explain the options available to you here:

• You receive precise stock numbers when you set up inventory tracking (more on this later).
• Using a CSV file, you update the inventory in each warehouse. You can export this CSV file from Shopify to check the quantities in stock for each product at each location. You then edit the file and re-import it into Shopify to update the inventory.
• When a product is out of stock, Shopify does not, by default, allow customers to purchase this item. However, you can disable this option in the inventory section of the product. This is particularly important when you are receiving new goods or want to sell the product before ordering it.
• In addition, you have the option of hiding out-of-stock products in your collections or in your standard catalog category.
• In the "Products" category, you can view the history of stock adjustments for an item (including variants) for the last 90 days. This feature is useful if there are discrepancies in the stock count or if there are damaged products.
• In the Shopify admin area, you can check the status of your stocks, for example, whether a particular item is available for purchase or is already reserved.
• In addition, you can also capture and track inventories from suppliers (including the expected delivery date) or between warehouses.
• If you have a Shopify subscription, you also get an ABC analysis. This report gives you insights into which products sell best and which ones are rarely ordered.

What are the advantages and disadvantages of inventory management in Shopify?

Although Shopify allows easy tracking of your inventories, the platform falls short in some aspects of inventory management. For this reason, we have summarized the advantages and disadvantages of inventory management in Shopify:

5 Advantages of Warehouse Management in Shopify

1. Stock tracking for each product: Shopify enables e-commerce entrepreneurs to set up individual lists for each product. You can even sort the products by their type, seasonal availability and customer demand. Next to each product, there is also a field for the inventory, which you can change manually.

2. Handling of product variations: Sellers can manage variants for each product without having to pay for it or use an additional tool in Shopify. This allows endless variants of a single item to be created. These variants could represent different colors, sizes, dimensions, prices and inventory numbers.

3. Access to inventory history: Owners can track the inventory development of each product (including its variants). You can check what changes have been made to product quantities, who made them and how many adjustments have been made in the last 90 days.

4. Cash flow optimization: As e-commerce sellers, you need to buy, store and sell products to generate revenue. Until these products are sold, they sit unused in the warehouse. This entails costs such as storage rent, energy costs, and wages for the warehouse staff. By tracking your inventory in Shopify, you get reports on projected sales and notifications when stock is running low. This prevents overstocking and allows you manage your cash flow better.

5. Better control and visibility: Shopify provides you with transparent information on each product. You learn when the items arrived, were picked, packed, shipped and produced. You also get a notification when a reordering is needed.

3 Disadvantages of Shopify Inventory Management

1. Many products are restricted in Shopify: Shopify has a long list of prohibited and restricted items. If your products fall into this category, you cannot track them on the e-commerce platform. Therefore, you have to manually implement a multichannel inventory management system to track the inventories of Shopify and other sales channels separately. This can be tedious and time consuming. In addition, it increases the risk of inconsistencies in the stock count.

2. Replenishment of stock does not happen automatically: Shopify will alert you by default when your stock is low, but it will not automatically place orders. In addition, your company inventory records are not automatically updated when you receive new products. To use these functions, you need additional inventory management software.

3. Reports and analysis: Shopify provides reports on the number of sales per day, week or month. However, you do not receive other information such as inventory turnover. This is because the platform does not track the entire lifecycle of your inventories - from acquisition to sale.

Step-by-step guide: How to set up Shopify Inventory Management?

The setup of the inventory management depends on whether you use Shopify on mobile devices (iOS and Android) or as a desktop version:

Desktop:

1. Log in to Shopify and navigate to the admin area.
2. Then go to "Products" and search for the item you want to track.
3. Click on the product name. If available, you can also select the product variant.
4. Choose the option "Track quantity" under "Inventory".

5. If you want customers to be able to buy the product even when it's out of stock, click on "Continue selling when out of stock".

6. In the "Quantity" section, enter the product quantities for each warehouse.

7. Finally, you just need to click on "Save".

iPhone and Android:

1. First open the Shopify app and navigate to "Products".
2. Now tap on "All Products" and then go to the item or product variant that you want to track.
3. Under "Inventory", turn on the option "Track quantity".
4. Click on "Approve purchase when item not in stock" if needed.
5. In the "Quantity" field, enter the product quantity. Android users then need to click on the check mark icon.
6. If you're using an iPhone, click on "Done" and then on "Save". For Android phones, just tap on the check mark icon again.

5 Tips for Optimizing Your Stock with Shopify

1. Organize your inventory: When you divide your inventory into priority groups, you recognize which items need to be ordered more frequently and in larger quantities. You can also identify important products that cost more and take longer to sell.

One way to categorize your inventory is the ABC rule. Group A includes the expensive items of which you need less. Group C are cheap products that sell quickly, while Group B is in between.

2. Track all product data: Make sure that you keep records of the product information of your inventories. This includes SKUs, barcode data, suppliers, countries of origin and batch numbers. You can also track the price development of individual items. This gives you insight into factors that influence product costs, such as scarcity and seasonality.

3. Check your inventory regularly: By conducting regular physical checks, you will become aware of damage, expired goods, or even thefts by employees. This is crucial to ensure your inventory data is correct. Depending on the products, you can conduct a comprehensive count annually, monthly or even daily for costliest items.

4. Control the work of suppliers: Unreliable suppliers can disrupt your supply chain or even your business operations. This is especially the case if they are regularly late with deliveries or frequently fail to fulfill an order. Therefore, it is important to monitor their work and be prepared to switch service providers if necessary.

5. Set safety and minimum stocks: The central question for all staff involved in inventory management is: "How much is enough?". As mentioned earlier, it is difficult to strike a balance between the risk of running out of stock and the fact that unsold items take up storage space.

To address this issue, you should keep an eye on your items and keep a safety stock. This is an additional quantity of a product that is kept in the warehouse to avoid out-of-stock situations. You should also consider your minimum stock. This is a quantity that should not be undersold. If you know this, you can order a new batch and receive it before your current stock is exhausted.

Which software can be used for warehouse management with Shopify?

Although Shopify already does a good job at warehouse management, you can expand the functions with inventory management software. Below you will find some of the most popular software solutions for managing your stocks:

• Zoho Inventory
• Megaventory
• inFlow Inventory
• StockTrim
• Fishbowl
• TradeGecko

Which apps are suitable for inventory management with Shopify?

The Shopify App Store offers a wide range of applications for inventory management. Here are some examples:

• Katana Manufacturing ERP
• Skubana
• Sellbrite
• ShipBob
• Stocky
• EasyScan
• Stock Sync

Are you looking for more inventory management systems that you can integrate into your Shopify Shop? Or would you like to get to know other e-commerce platforms like WooCommerce and Shopware? Then you should visit OMR-Reviews now. Thanks to the verified reviews from our users, you will gain deeper insights into individual solutions and find the right tool for your business.