- 1. Set Up Inventory Tracking
- 2. Choose Inventory Locations
- 3. Configure Low Stock Alerts
- 4. Sync Inventory Across Sales Channels
- 5. Use Bulk Editing for Efficiency
- 6. Handle Incoming Stock
- 7. Manage Overselling and Backorders
- 8. Leverage Shopify Reports and Analytics
- 9. Conduct Regular Inventory Audits
- 10. Integrate Apps for Advanced Management
Effective inventory management is the backbone of a successful Shopify store. It ensures you meet customer demand, avoid overselling, minimize stockouts, and maintain healthy cash flow. Shopify’s built-in tools simplify the process, but mastering them requires strategy and attention to detail. As of February 22, 2025, here’s a comprehensive guide to the essential steps for managing your Shopify inventory like a pro, leveraging native features and best practices.
1. Set Up Inventory Tracking
Shopify’s inventory tracking is the foundation of good management—start here.
- Enable Tracking: In your Shopify admin, go to Products > select a product > Inventory section. Check “Track quantity” for each item you want to monitor.
- Add SKUs: Assign unique Stock Keeping Units (SKUs) to every product variant (e.g., “T-SHIRT-BLUE-M” for a medium blue t-shirt). This keeps things organized.
- Set Initial Quantities: Enter current stock levels manually or import them via CSV (under Products > Import) if you’re starting with existing inventory.
2. Choose Inventory Locations
Shopify supports multiple locations, making it easier to manage stock across warehouses or stores.
- Add Locations: Go to Settings > Locations and add each physical storage site (e.g., “Main Warehouse,” “Retail Store”).
- Assign Stock: For each product, under Inventory, allocate quantities to specific locations. Shopify tracks stock per location automatically.
- Primary Location: Set your main shipping point as the primary location for accurate fulfillment.
3. Configure Low Stock Alerts
Stay ahead of stockouts with proactive notifications.
- Set Thresholds: Shopify doesn’t have a built-in alert feature, but you can use apps like Stocky (free for Shopify POS users) or manually monitor. Define “low stock” (e.g., 5 units) based on sales velocity.
- Check Reports: Go to Analytics > Reports > Inventory to view stock levels. Filter by “Low Inventory” to spot risks.
- Automate: Install apps like Inventory Planner or TradeGecko for automated alerts if you need more robust tracking.
4. Sync Inventory Across Sales Channels
Selling on multiple platforms? Keep everything in sync.
- Enable Channels: In Settings > Sales Channels, connect platforms like Amazon, eBay, or Instagram. Shopify syncs inventory automatically if set up.
- Centralize Control: Update stock in Shopify only—it reflects across all channels to prevent overselling.
- Test Syncing: Place a test order on a secondary channel to ensure quantities adjust correctly.
5. Use Bulk Editing for Efficiency
Managing large catalogs? Save time with bulk updates.
- Select Products: Go to Products, check multiple items, and click Edit Products. Adjust quantities, SKUs, or locations in one go.
- CSV Updates: Export your inventory ( Products > Export), edit in a spreadsheet, and re-import. Perfect for seasonal adjustments or new stock arrivals.
- Double-Check: After bulk edits, spot-check a few products to confirm accuracy.
6. Handle Incoming Stock
Restocking is a critical step—process it systematically.
- Receive Inventory: When new stock arrives, go to Products > Inventory > Adjust Inventory. Enter the received quantity per product and location.
- Transfer Between Locations: Moving stock? Use Inventory > Transfer to record shifts (e.g., warehouse to store) without affecting total counts.
- Record Dates: Note arrival dates manually or via apps to track stock age for FIFO (First In, First Out) selling.
7. Manage Overselling and Backorders
Avoid customer frustration by controlling overselling risks.
- Set Policies: In Products > Inventory, choose “Shopify tracks this product’s inventory.” Select “Do not allow customers to purchase when out of stock” to prevent overselling.
- Enable Backorders: Alternatively, check “Continue selling when out of stock” for pre-orders, but notify customers of delays via email or product pages.
- Monitor: Regularly review Orders for unfulfilled items flagged as “Out of Stock.”
8. Leverage Shopify Reports and Analytics
Data-driven decisions keep inventory optimized.
- ABC Analysis: Use Analytics > Reports > Product Sales to identify top sellers (A), moderate movers (B), and slow items (C). Stock more As, less Cs.
- Stock Levels: Check Inventory Reports to see quantities on hand, committed (in open orders), and available.
- Sales Trends: Analyze Sales Over Time to predict seasonal demand and adjust stock proactively.
9. Conduct Regular Inventory Audits
Periodic checks ensure your records match reality.
- Cycle Counts: Audit a subset of products weekly (e.g., 10 items) instead of full counts. Use Shopify’s Inventory Adjustments to correct discrepancies.
- Physical Counts: For a full audit, export inventory, count physically, and update via CSV or manual entry.
- Schedule: Plan audits quarterly or during slow periods to minimize disruption.
10. Integrate Apps for Advanced Management
Shopify’s core tools are solid, but apps can take it further.
- Stocky: Ideal for purchase order management and stock forecasting (free with Shopify POS).
- Inventory Planner: Forecasts demand based on sales history for smarter restocking.
- TradeGecko (QuickBooks Commerce): Syncs with accounting for a full business overview.
- Install Wisely: Test one app at a time and ensure it fits your workflow before committing.