shopify inventory management

Your Shopify Inventory Management Guide for Store Success

If you’re running an ecommerce store, you probably deal with some level of inventory along with the perks and pains of managing it all. You may or may not be tuned into the sheer importance of a solid Shopify inventory management system, but this is a huge key to success for your online store.

It’s understandable if you’re a bit rusty in this area, but a good place to start is learning about inventory management itself and why it’s so important for your business. Once you’ve read up on that, check out how inventory management works with Shopify, why you might need a third-party inventory management tool, and how to choose one that works best for you. Finally, we’ve rounded up some solid picks to consider.

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What is Inventory Management?

inventory management ecommerce

Inventory management is a system to organize how inventory moves through your store’s supply chain. This includes sourcing, storing, and selling inventory for your business. A good inventory management system allows you to keep a pulse on raw materials and finished goods. This includes tracking how many items or SKUs you have in your Shopify or brick-and-mortar store locations and estimating how much more of each item you’ll need to restock and by when.

Plus, it helps track and inform your inventory’s processing, logistics, and storage.

Why Shopify Inventory Management Is Important for Your Store

For Shopify and any other type of business, inventory management is critical for maintaining optimal inventory levels to achieve a variety of things.

Minimize Inventory Costs and Avoid Stocking Issues

It’s very easy for Shopify businesses with inventory management issues to buy too much stock, which holds up their cash, or oversell to the point they can’t fulfill orders. Letting this happen to your business can quickly damage your reputation and profitability, to the point that nearly 40% of potential buyers switch to a competitor when they encounter an out-of-stock item.

With a Shopify inventory management system, you can avoid this by confidently telling your shoppers exactly how many items you have in stock through accurate SKU tracking and status display of items in your distribution channel.

Manage Cash Flow

Through an inventory management system, you get a glimpse into your cash flow and assets. This can help you better understand how much to budget for stock or invest elsewhere. For example, when you know how much stock you’ll carry over month-to-month, you can predict how much space you’ll need to store it and therefore how much warehouse storage you’ll need to rent. This will also help inform things like when to restock products and which ones to discontinue, along with a pricing strategy.

Sell on Different Channels

As your business grows and you see the benefit of selling not just on Shopify but on other channels too, inventory management becomes that much more important. The bigger you get, the larger the administrative burden of manually tracking and fulfilling orders becomes. It simply gets harder to scale and meet your customers’ needs, not to mention managing all of the inventory and orders coming into each new channel. An inventory management system does this for you while providing insight into the stock needed for each channel.

There are other important reasons to implement a sound inventory management system. You’ll be able to:

  • Forecast demand and optimize fulfillment.
  • Prevent loss from returns, spoilage or lost items.
  • Offer customers accurate information and better service.
  • Get invaluable insight into your store’s performance and profitability and business opportunities and new ideas or innovations.
  • Learn about customer shopping and buying behaviors and preferences or interests.

When you use a great Shopify inventory management tool, like Simple Purchase Orders, you’ll get a structured framework to easily run a thriving ecommerce store. And, as your business grows into multiple channels with robust marketing, you’ll need an inventory management system and strategy to support that. While Shopify offers many POS and online tools to support you in this, you’ll need to structure your systems and processes accordingly.

There are many benefits and drawbacks to Shopify’s inventory management which we’ll get into next.

Inventory Management With Shopify

managing ecommerce inventory

The great thing about Shopify is that businesses of any size, from a small family-run shop to a multinational retailer, can quickly and easily set up an ecommerce store. The platform comes with many native tools, including inventory management and tracking. These tools are ideal for businesses with a more straightforward inventory process with few steps, since they track individual items.

The challenge comes in when you grow or scale up your business to different channels, or if you’re working with complex processes or supply chains. If this is something you’re thinking about doing or have already done, you’ll need to take a close look at your unique needs, understand the challenges you face, and find the right solution for your business.

For example, you’ll save a lot of time and effort with an inventory management tool like Simple Purchase Orders. These types of tools easily help you track POs and incoming inventory, restock merchandise, and transfer stock into your store.

When you’re looking into inventory management for Shopify, start by utilizing its great features while being aware of the challenges inherent to it.

Shopify Inventory Management Features

Track inventory on individual listings

You can create individual listings with a manually adjustable inventory field. Each product can conveniently be organized by things like type, category, or season.

Manage inventory for product variations

It’s easy to manage product variations in one place. Create multiple versions to represent a product’s various colors or sizes. Then, customize the pricing, SKU, weight or size, and inventory number for each variation.

Transfer inventory

With Shopify’s inventory management, you can easily log, track, and receive transfers between your suppliers and warehouses that don’t use third-party services for fulfillment.

Make inventory updates in bulk

You can quickly update inventory quantities for multiple product locations and variations with the bulk editor. The mass inventory adjustment information displays like a spreadsheet with columns and rows of data.

View your inventory history

It’s incredibly useful to look into your store’s inventory history for information on changes to your products or variations of them. You’ll see details of the date, fulfillment team member, changes made, and updated quantity.

Shopify Inventory Management Challenges

Some products don’t integrate with Shopify

While Shopify has some great things going for it, it also has a lengthy list of restricted and prohibited items. If your business happens to sell any of them, you’ll have to manually implement and manage multichannel inventory on additional platforms, separate from your Shopify store. This means more time and tedious work is required, plus you run a greater risk of overselling – and negatively impact your shoppers’ experience – because of inventory inconsistencies between platforms or channels.

Automated inventory replenishment is needed

The larger your Shopify SKU library is, the more complex and involved your inventory replenishment workflow gets and the more room for errors like miscounts and stockouts there will be. You need to find a tool that minimizes errors as it generates POs automatically when your stock depletes and recommends order quantities for optimal replenishment. Thankfully, there are tools out there like Simple Purchase Orders with an auto-order fulfillment feature that creates POs for your suppliers when an order comes in and automates dropshipping.

Functionality and insight across channels is inconsistent

If you’re running a multichannel business, you need a cohesive view of your inventory and analytics. This includes the way your inventory is distributed across item listings and insight into each SKU’s profitability by channel, beyond Shopify. While Shopify cannot accommodate all of these things on its own, there are many inventory management tools that integrate well, like Simple Purchase Orders, to make your process smooth and efficient.

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How to Choose a Shopify Inventory Management Tool

Now that you know how a Shopify inventory management tool can benefit your business, it’s time to consider what to keep in mind when shopping around for one. 

The Amount and Type of Inventory You Track

Whether you’re a small business just starting out or have been at it for years with many retail channels and locations, there are many types of Shopify inventory management apps to choose from. The solution you choose should align with the scale and size of your business so that you’re not paying for functionality you don’t need.

There is a balance though – don’t limit yourself to something too simple if you plan on expanding or adding channels down the road. Try to plan ahead as best you can in a way that makes sense for your store. It’s much easier to use a tool with extra features you might use later than it is to get exactly what you need today only to find your needs have expanded a year from now.

As well, since Shopify doesn’t track absolutely everything, like raw materials, expiry dates, and batches, you might need a specific solution that caters to these things.

Your Team’s Size

Many SaaS companies offer tools and apps for a monthly fee, based on the number of users. Tiered pricing is common, where the fewer users you have, the less you pay per month. So, it can be pretty cost-effective to limit licenses only to those team members who absolutely need one.

Your Budget

Of course, budget is an important factor in any business purchase. What’s great is there are many inventory management tools available for nearly any budget. There’s something for everyone, whether it’s a robust tool with every feature imaginable, a great middle-ground between value and function, or a free or low-cost solution to simply try out and see what you think. Simple Purchase Orders offers a few plans that hit all of these areas.

Integration With the Tools You Use and Love

You’re very likely using tools and apps already that you don’t want to give up, so it’s important to see if and how they’ll integrate with your chosen Shopify inventory management solution. Get yourself organized and list out all the tools you use so you’re ready to investigate their compatibility when shopping around.

Top Shopify Inventory Management Tools

With so many inventory management tools out there, it can feel pretty overwhelming to sift through the information and make a decision. So, we’ve taken some guesswork out of the process for you with this list of our top Shopify tools for inventory management.

Simple Purchase Orders

SPO best inventory management tool

Simple Purchase Orders smoothes out your purchase order process while saving you money and time by automating POs, restocking your inventory, and fulfilling split dropship orders. It’s easy to use Simple Purchase Orders and you don’t need any coding skills to do so. You can easily set up suppliers and import products and their cost prices, including in bulk. As well, you can automatically send and split orders between suppliers in seconds by creating and emailing PDFs.

Simple Purchase Orders makes inventory management super simply by tracking what needs to be restocked and instantly transferring it to your store. Order fulfillment is also sped up through automated, customized POs and dropshipping.

Simple Purchase Orders Features

  • Create auto-filled POs with an order, product, supplier.
  • Enjoy complete control over how your POs look with a customizable template engine.
  • Customize everything down to each product variant by setting up notes, cost prices, and supplier SKUs.
  • Automatically send your suppliers orders as soon as you’re paid.
  • Add elements to your POs automatically, such as each product variant’s cost price, and details on your store, supplier, and customer.
  • Use any currency that makes sense for you and your customers, as the tool supports all.

Back in Stock

shopify back in stock notifications

As a comprehensive back in stock notification app, Back in Stock can help you gauge interest in products before reordering them, collect pre-orders, and notify shoppers of products currently out of stock.

It comes with some great features:

  • Analytics dashboard and reports that use data to maximize conversions of recently restocked items.
  • Customizable email templates with easy-to-make changes using “no code” settings or editing HTML.
  • Customizable “Email when available” signup form and button that matches your Shopify store’s theme.
  • Instant setup of Shopify theme integrations, and creation of more on request.
  • Mailing list integrations when customers sign up for back in stock notifications.
  • Quantity required field on back in stock notification signup forms, to precisely measure an out of stock item’s demand.
  • Email delivery settings that give you total control over sending your customers notifications to your customers.
  • Instant and scalable email delivery that notifies customers when an item is restocked, even in high-volume stores.
  • Experienced support to help you customize and configure the tool on your store.
  • Shoelace retargeting integration that automatically creates retargeting campaigns to boost your conversion rates.

Inventory Planner

inventory planner tool

Inventory Planner comes with a number of features like automatic replenishment recommendations, sales forecasts, and trend reporting to identify what’s going on with your business. You can send POs directly to suppliers and track outstanding orders, arrival dates, and received inventory. Get insight into your sales trends and inventory needs so you can control what items to replenish and where for every sales channel.


skulabs inventory management

SKULabs gives you streamlined inventory management by enabling you to easily manage your stock with precision and accuracy. It synchronizes with all of your retail channels, checks and scans barcodes to tally, receive, or pick stock, and reduces your transport costs by checking rates between different freight companies.


sellbrite inventory tool

When you add Sellbrite to your checkouts on marketplaces like Amazon, Etsy, and eBay, you can reach the world right from your Shopify store. With this tool, you’ll get access to features like multiple warehouse locations, integration with Fulfillment by Amazon, and a centralized spot for order fulfillment. Sellbrite will automatically adjust and sync inventory information so you won’t oversell products and your customers will know exactly what to expect.

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