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Mastering Shopify Inventory Management: A Comprehensive Guide

guide to shopify inventory management
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Inventories are the available quantities of a particular product. Inventory management is used to organise and manage stock throughout the supply chain, ensuring correct inventory data is maintained. Inventory management aims to reduce holding costs, maintain stock levels consistently, and get products into customers’ hands faster. Any successful retail or eCommerce business relies on inventory management.

Are you having trouble managing your inventory? In this guide, you’ll learn the Shopify inventory management techniques, formulas, and stock management tips that satisfy your customers. Enhance your business Shopify inventory management easily with Intellect Outsource today!

What is Inventory Management?

An inventory management system helps a business order, store, organise, and move inventory through its supply chain. An inventory system is a digital tool that helps businesses manage their stock across various locations and devices. By doing so, businesses are assured that the right amount of product is available at the right time in the right place. Moreover, it keeps track of your company’s stocked goods, including their weight, dimensions, amounts, and locations.

Stock management minimizes the cost of holding inventory by alerting you when a product is running low or more material is needed to make it. Maintaining optimal inventory levels and minimizing costs are made more manageable this way.

  • Inventory Management Vs Inventory Control

    There is a slight difference between inventory control and inventory management.

    In inventory management, you also forecast demand, order, and receive inventory, while inventory control regulates, monitors, and handles the list you already have at your store.

  • Inventory Vs Stock

    In inventory, you may also have materials used to make the finished goods and the finished goods themselves. Stock refers to finished goods available to sell to your customers, while inventory relates to materials used to make them. Stocks are included within the inventory, but not all inventory is called stock because of this subtle distinction.

Why is Inventory Management Important for Shopify Stores?

Zoho Software Inventory Management dashboard

Building a successful Shopify store requires proper inventory management. According to Shopify statistics, inventory mismanagement costs sellers almost $2 trillion yearly. In addition to overstocking, out-of-stock items, and preventable returns, the losses are spread across all three areas.

Accurate inventory data is crucial for making informed decisions on product assortment, pricing, and promotions.

It’s interesting to note that these aren’t the only problems associated with inventory management. Missing items, misplaced inventory, incorrect product packaging, and delivery are still common problems for Shopify store owners. You’re well on your way to building an eCommerce business that is genuinely agile if you can establish a solid inventory tracking system on Shopify.

Shopify stores use inventory management to source, store, and track their inventory. You will have the right stock at the proper levels, at the right place, at the right time, and at the right price, and that will show up on your Shopify store listings with an inventory management system. Your brand will be better positioned to survive, grow, and profit by avoiding preventable losses such as out-of-stock items, overstocking, and returns.

How to Manage Inventory on Shopify & its Importance:

The management of inventory is essential to the success of Shopify stores. You’ll optimize order fulfillment, reduce inventory costs, and better serve your shoppers if you get this aspect of your business right. Proper inventory management offers the following benefits:

  • Accurate Tracking of Products

    To be profitable, Shopify store owners must meet the needs of their customers. You’re likely to have many dissatisfied customers if you frequently overstock, are out of stock, or oversell. The customer may never return to you after making a purchase elsewhere.

  • Better Cash and Stock Management

    Overstock leaves your capital idle and wastes valuable storage space if it can’t be sold within a reasonable timeframe. Stocking the right amount of product minimizes dead stock on your shelves and balances cash flow. Shopify stock helps you maintain all these parameters.

  • Forecasting Demand and Multichannel Sales

    Integrating multiple marketplaces seamlessly requires proper inventory management. Consider the case where you sell on Etsy, eBay, Amazon, and your business website. You must keep track of your stock levels to ensure accurate information is conveyed to customers in those cases. In addition to helping you accurately forecast demand, inventory management also provides you with what your customers need at all times.

  • Cost-savings on Inventory

    You can manage your resources efficiently by undertaking virtually every inventory management task. Keeping the right amount of products in stock will save you money on storage. Furthermore, your turnover rate will be optimal, so there will be fewer bad or expired inventory cases. Customers who can get what they need whenever they need it cannot be quantified.

  • Store Inventory Control

    Due to varying demand levels across multiple marketplaces, you may often need to transfer inventory between them. Tracking your performance and monitoring each channel’s inventory level becomes more difficult if you do not follow the correct inventory management practices when moving inventory.

Best Practices to Follow While Setting up an Inventory

Shopify dashboard setting up Inventory

Following the best practices is the foundation of efficient inventory management. The following tips will help you manage your inventory accurately:

Keeping accurate inventory records, including barcodes, SKUs, and transaction history, is essential for efficient product movement.

  1. Keep Your Inventory Organized

    When your products are organized, you’ll know the “most ordered item” and when it will be out of inventory. By doing this, you can focus your efforts on more profitable products.

  2. Maintain Regular Inventory Audits

    For some merchants, inventory audits can occur monthly, weekly, or once a year. Make sure you audit your stock quantity to ensure it is accurate. This way, you can keep your inventory moving smoothly and manage your stock flow.

  3. Ensure Customer Satisfaction

    Customer satisfaction should be your top priority. Inventory management is crucial to ensure this happens. Sales and profits will suffer if you have low inventory and customers can’t order. The worst thing to happen to your store is that your customers may not return. Making sure your customers are satisfied is the best way to avoid losing them.

  4. Employ an Inventory Manager

    Hiring the right people allows you to focus on other aspects of your business. Keeping track of each item can be done by an inventory manager in this case. In addition, they will always be available to deal with suppliers and pay invoices.

  5. Utilise Inventory Management Software

    Managing your stock on Shopify is easy with the right inventory management app. It can also help you reduce the risk of overselling and save time. Additionally, Shopify inventory management software enhances inventory accuracy. If you’re looking for an app, ensure it integrates seamlessly with your existing technology stack.

What Happens if You Manage the Shopify Inventory Badly?

Shopify inventory management

A sound inventory management system is essential for several reasons.

In addition to fulfilling orders on time and completing sales successfully, managing your stock well has spillover effects on many aspects of your business. Implementing advanced inventory management solutions can help automate stock alerts, track inventory across multiple locations, and improve overall revenue.

It can be positive or negative. According to Shopify's Future of Ecommerce Report 2021, fulfillment is a “competitive differentiator” and features three takeaways:

  1. Today’s brands have four fulfillment mandates: fast, free, sustainable, and branded.
  2. Establish free-shipping thresholds for eCommerce orders to preserve profit margins to protect margins.
  3. Make fulfillment more competitive by placing inventory closer to customers, automating returns, and offering curbside pickup options.

Staying competitive today requires excellent fulfillment. Its core is inventory management.

And what happens if it goes wrong?

You can have a domino effect on your entire business if your inventory management is poor.

  • Unfulfilled orders and unhappy customers can result from not recording stock levels properly, as can delay restocking and sales backlogs.
  • Customer issues may cause them to lose trust in your brand and cancel orders or avoid shopping with you in the future.
  • Bad feedback from unhappy customers can hurt your sales and search engine visibility.
  • Rather than planning for and getting ahead of sales, your business may become reactive rather than proactive.
  • You may have difficulties determining which items sell well on which channels and which platform is worth investing more money on in the future if you sell on more than one channel.
  • Due to these outcomes, business owners, entrepreneurs, or businesses will not be happy or healthy.

Bad Inventory Management Costs

You might not expect the costs to be so extensive, such as:

  1. Storage costs:

    Your stock needs somewhere to live, whether that's your living room or a warehouse with utilities and overheads. You will be charged for long-term storage with Amazon FBA, for example. Similar practices are likely to be found in Shopify's fulfillment network.

  2. Removal Costs:

    The cost of removing unsold items from storage may need to be paid. You cannot prevent this from happening in the future without good management.

  3. Opportunity Costs:

    Poor inventory management leads to enormous opportunity costs, as you can see above. Fulfillment is critical in eCommerce, where your entire business model is based on it.

  4. Disposal fees:

    If you work with a third-party logistic company, you will have to pay to eliminate unsold or old inventory.

  5. Customer Distrust:

    According to Shopify's Future of Ecommerce Report 2021, customer retention has taken precedence over customer acquisition this year due to rising advertising and marketing costs. Don't expect your customers to return if they don't have a good experience.

  6. Bad reviews:

    Getting bad reviews shared online is far from ideal since social media is a powerful tool. Also, this can negatively impact how many visitors find your store in search results.

    Inventory management process can be optimized by implementing Shopify Data Entry services.

Features to Look at in Shopify Inventory Management Software

Numerous third-party inventory management apps available in the Shopify App Store can make up for the shortcomings of the native app. Shopify’s inventory management software is typically layered over these apps by brands that sell across multiple channels. Among the scores of available apps, how do you know which one to choose?

Popular inventory management apps like Stock Sync offer features such as inventory quantity tracking, stock level alerts, and automatic inventory updating.

A good inventory management app should have these eight features.

  • A multi-channel and multi-warehouse approach

    Inventory management apps should be able to sync inventory across all sales channels and fulfillment centerss. Updates to your list should be reflected in real time or within 15 minutes at the latest.

  • Automating the order routing process

    You should choose an app that automatically routes orders to the nearest fulfilment centre to save on shipping costs. Based on inventory availability, destination zip code, and delivery date, orders will be routed based on fulfilment centre availability. The inventory management app should direct orders to the warehouse, which will deliver them cost-effectively and promptly.

  • Features of inventory control

    Your listings should be able to adjust unit counts across channels with the help of an app. A real-time inventory adjustment is necessary to prevent overselling or processing payments for orders that cannot be fulfilled.

  • Analytical and reporting capabilities

    A good inventory management app should provide real-time information about stock levels, inventory turnover, sales margins, profitability, etc. These metrics can help you make your purchase decisions and improve customer satisfaction.

  • Inventory shared across listings

    A good app should be able to track inventory across multiple listings. Managing multiple inventory listings based on one source is one of the limitations of the native Shopify app.

  • Refilling inventory automatically

    Your inventory management system should automatically generate purchase orders with low stock levels. Furthermore, previous sales data should be used to recommend order quantities. Stock replenishment will be significantly streamlined with these capabilities.

  • Locked Inventory

    You may want to prevent special promotions and preorders from appearing on your listings. The total inventory should still include them since pre-orders, and promotional sales will be processed. Such products can be locked with the best Shopify inventory management apps or services.

  • Capabilities across channels

    An eagle’s eye view of inventory and sales across multiple channels will benefit brands that sell across various channels. For example, they need to understand how each SKU appears across listings, how much inventory is in each warehouse at any given time, and how much seems across all channels. In some inventory management systems, these essential information pieces are unavailable.

Why Should you Choose Intellect Outsource for Shopify Inventory Management?

With Intellect Outsource, you can manage your Shopify inventory in a way that efficiently fulfills orders, manages inventory, and gives you the best shipping rates. With a client base that spans more than ten countries, Intellect Outsource has become one of India’s most rapidly growing eCommerce service providers.

Understanding the production process is crucial for maintaining the required inventory levels and ensuring smooth operations.

Below are some advantages of Intellect Outsource: Inventory Management System Shopify services:

  1. Hassle-free Inventory Tracking

    Outsource inventory management goes beyond knowing what’s left in your warehouse. The Shopify inventory integration tracking feature allows you to track your inventory, follow it across warehouses, monitor sales data across all sales channels, determine the best shipping routes, and provide insight into the customer experience, among other things.

    Using these features, you can ensure your customers have the best shopping experience while monitoring inventory movement in and out of your fulfillment centers.

  2. Have Accurate Information on Your Website

    Ensure faultless inventory management for online stores by working round-the-clock with Intellect Outsource Shopify data entry. Your e-commerce is constantly updated to reflect any changes. The information must be accurate. Data that is incorrect or outdated can cause problems. In addition to losing money, that can damage your reputation as well. You will not experience any of these with Intellect Outsource.

  3. Support for Shopify Stores

    Intellect Outsource’s end-to-end Shopify support & Shopify stock management services provide many benefits for your store at a reasonable price. They guarantee the best service for your online business once you outsource regular tasks to them. A few services they offer are bulk addition of new products, updates to existing products, customer support via email and chat, complete catalog management, etc. Trust Intellect Outsource and start inventory management in Shopify with them. This way, you can make your business succeed and your dreams come true.

    Choose Intellect Outsource Shopify Data Entry Services to avail the following benefits:

    • You can have a free trial
    • 24/7 Support will be provided for your business
    • 99.99% Accuracy in Inventory Management
    • Intellect Outsource has efficient product data entry experts
    • Last but not least, they have had 1000 satisfied clients in all these 12 years.


Shopify's native inventory management app can meet your needs if you only sell a few items. As you expand your SKU library and explore other channels, the app's limitations become more apparent. SKUs must be manually entered into individual listings, and stock levels must be updated. In this way, your stock managers can make better use of their time, much like they would if they used spreadsheets to manage their stock.

With Intellect Outsource, an all-encompassing inventory management software that seamlessly integrates with Shopify, you have everything you need to manage your inventory. With multi-channel inventory management capabilities, you can streamline your inventory management operations and increase operational efficiency. Besides that, what else is there? As a result, you will incur significant cost savings and retain high customer satisfaction, just what you need to stay competitive.

Having said that, Inventory is the key factor to building & growing your business. So, contact Intellect Outsource today!

Frequently Asked Questions

Managing inventory by yourself is a good choice, but if you have an app like Shopify that lessens your time, you can focus on your core business more.

Four Common Shopify Inventory issues are,

  • It has no Raw Material Inventory Tracking option
  • If you run low on a specific product, Shopify won’t notify you.
  • It doesn’t have batch, expiry, or serial tracking
  • Shopify, being an inventory software, does not track the whole life cycle of your inventory. Also, it does not provide inventory turnover reports or purchase history.

Consider these Shopify inventory management tips to overcome common tracking issues and improve your inventory accuracy.


Intellect Outsource offers seamless ecommerce management services, including bulk ecommerce product data entry & product upload, online store development, virtual assistants, complete product catalog management, online store backend operation, and many more. We are here, ready to start discussing how to help you succeed in the ecommerce business. Ready to work with us?

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