Running an online store isn’t just about adding products and hoping people buy them. You also have to manage your inventory the right way. That means keeping track of what you have, so you don’t run out or sell more than you have in stock.
This is where Shopify inventory management comes in.
Whether you’re just starting or having trouble keeping your stock organized, this step-by-step guide will help. It covers the basics of inventory management on Shopify. You’ll learn how to set it up, automate tasks, see real examples, and get expert tips. These tools and ideas can help you stay ahead and make more money.
📊 A report from Tools Group says bad inventory management causes over $1.75 trillion in lost sales worldwide every year.
Understanding Shopify Inventory Management
What Is Inventory Management in Shopify?
The purpose of inventory management is to keep track of the items you sell. In Shopify, it means seeing what’s in stock, what’s running low, and what you need to restock, all from one place.
Why It’s Important:
- Helps stop overselling and backorders
- Saves time by cutting out manual work
- Keeps stock levels correct across all your sales channels
Shopify makes it easy to manage inventory. You can track quantities, use barcodes, set alerts, and more. It works whether you sell one product or thousands.
✅ Shopify says that stores using real-time inventory management save over 10 hours per month by avoiding manual tasks.
Key Features of Shopify Inventory Tracking
Source: Shopify
With Shopify, you have strong tools for managing your stock:
- Real-Time Inventory Updates – Your stock updates automatically as customers place orders.
- Multi-Location Inventory – Track stock in more than one place (like a warehouse and a retail store).
- Stock Alerts – Receive notifications when stock is low.
- Barcodes and SKUs – Keep product info neat and easy to track.
- Inventory Reports – See your bestsellers, slow items, and total stock value.
📈 Real-time inventory tracking can reduce stock errors by as much as 70%, according to bluedgeusa.com.
Step-by-Step: How to Manage Inventory in Shopify
Step 1: Turn On Inventory Tracking
To start tracking stock, you need to turn on inventory tracking for each product.
How to do it:
- Go to your Shopify Admin and click Products
- Pick a product and click Edit
- Scroll to the Inventory section
- Check the box that says “Track quantity”
- Choose if you want to let people buy when the stock is at zero or stop sales
⚠️ Tip: Unchecking “continue selling” helps stop you from selling items you don’t have.
Step 2: Add and Organize Products Correctly
A good organization makes everything easier. That means clean product codes, smart groups, and clear tags.
Best practices:
- Use the same SKUs across all places you sell
- Group products by type (like “men’s shoes” or “accessories”)
- Use helpful tags like “bestseller,” “seasonal,” or “limited edition”
- Provide the right size and color options for products
💡 Pro Tip: If you sell bundles or kits, give them their SKUs. Track the parts inside using inventory apps or a custom system from Bizspice.
Step 3: Set Stock Levels, Alerts, and Reorder Points
To avoid running out of stock suddenly, use backup stock and automatic reordering.
How to manage this:
- Pick a minimum stock level (when to reorder)
- Choose a target stock level (your ideal stock amount)
- Turn on email alerts or use apps like Stocky, Prediko, or Restock Rocket
💡 InFlow Inventory says using auto reorder points can cut stockouts by 25%.
Shopify Inventory Management Best Practices
To do even better with inventory, try these proven tips used by successful stores.
1. Do Regular Stock Checks
Even with automation, mistakes or missing items can happen. Plan checks weekly, monthly, or every few months.
- Cycle Counts: Count a part of your stock regularly
- Full Audits: Count everything at once, great every 3 months
Use Shopify inventory reports to compare your numbers to what’s expected.
2. Use FIFO or LIFO Systems
- FIFO (First In, First Out): Sell the oldest stock first, good for items that go out of style or expire
- LIFO (Last In, First Out): Sell the newest stock first, can help when prices change often
Shopify doesn’t do this automatically, but you can use tags or third-party tools to help.
Source: Shopify
3. Try ABC Analysis
This helps you focus on your most important products.
Category | What It Means | What to Do |
A Items | High value, low sales volume | Check often and manage closely |
B Items | Medium value | Moderate control |
C Items | Low value, high sales volume | Keep it simple |
Tools like Sniffie.io or Inventory Planner can sort your SKUs like this.
4. Track Important Inventory Numbers
Don’t guess, watch your numbers.
- Inventory Turnover Rate = Cost of Goods Sold divided by Average Inventory
- Sell-Through Rate = Units Sold ÷ Units Received
- Stockout Rate = (Out of Stock SKUs ÷ Total SKUs) × 100
Best Shopify Inventory Tools and Integrations
You don’t have to do it all by hand. Shopify works with apps that can manage different parts of your inventory.
Tool | Best For | Features | Limitations |
Stocky | Stores using Shopify POS | Forecast demand, get alerts | Needs POS Pro subscription |
Big stores | Multichannel, auto orders | High price | |
New/small businesses | Basic tracking & invoicing | Limited Shopify features | |
Growing stores | Syncs inventory and accounting | Might need extra setup | |
Unique needs | Tailored features, smart tools |
💡 Want an app made just for your business? Bizspice can build it for you.
Real-World Success Stories
ANIÁN: Managing 10,000+ SKUs
This Canadian fashion brand uses Shopify’s tools to manage thousands of products. Their plan includes:
- Using multi-location tracking
- Automating reorders
- Grouping products by season with smart collections
Tico Coffee Roasters: Cutting Stockouts
Tico added Shopify POS and restock alerts. This cut their out-of-stock problems by 30%. They use Stocky to plan for busy times.
Stuga: A Bizspice App Success
Stuga needed help with future shipping and planning stock. Bizspice made a custom app that:
- Auto-updates stock based on shipping times
- Sends alerts to suppliers
- Syncs pre-orders with real stock
📦 “Thanks to Bizspice, our inventory flows smoothly,” says their operations manager.
Common Mistakes to Avoid
- Making It Too Complicated: Don’t use five apps when one will do. Keep it simple.
- Skipping Regular Stock Checks: Apps help, but you still need to count sometimes.
- Ignoring Data: Guessing can lead to too much or too little stock. Use real reports.
- Forgetting Seasonal Changes: Change your reorder amounts based on the time of year.
Bonus: For Dropshippers
FAQ: Shopify Inventory Tracking
Go to Products → Pick a product → Inventory → Check “Track quantity”.
Use ABC analysis, do regular audits, track key metrics, and automate reorders.
Yes! It updates in real time, and apps like Stocky make it even better.
Try Stocky, Skubana, Zoho Inventory, QuickBooks Commerce, or Bizspice custom apps.
Conclusion: Your Inventory = Your Profit
If you want a successful Shopify store, you must manage your inventory the right way.
Using Shopify’s tools, great apps, and following smart tips like regular checks and ABC analysis will help you avoid problems and grow your business.
This guide gave you:
- A simple setup process
- Smart strategies to boost inventory control
- Tool suggestions for different needs
- Real examples from real businesses
- Tips from expert platforms like Sniffie.io and Prediko
💼 Need something custom for your Shopify store? Bizspice builds smart systems to help brands grow.
👉 Reach out to Bizspice today and take control of your inventory before it controls you.