Introduction
Inventory management is the backbone of any successful ecommerce business. Without a reliable system in place, stockouts, overstocking, and fulfillment delays can quickly derail customer satisfaction and profitability. Thankfully, Shopify offers powerful built-in tools and integrations to help store owners keep their inventory accurate, organized, and up to date.
Whether you’re managing hundreds of SKUs or just starting out, this guide will walk you through how to manage inventory efficiently on Shopify, from stock tracking and multi-location support to automated alerts and advanced app integrations. Learn how to make smarter decisions, reduce errors, and optimize your operations—all from the Shopify admin.
Why Inventory Management Matters
Poor inventory management can result in:
- Lost sales due to stockouts
- Increased costs from overstocking
- Inaccurate reporting, affecting purchasing decisions
- Negative customer experiences due to order cancellations
Effective inventory management ensures your store runs smoothly, scales efficiently, and maintains trust with customers.
Key Inventory Management Features in Shopify
Shopify offers robust inventory management capabilities natively, without the need for third-party systems (though you can integrate more complex tools if needed).
1. Inventory Tracking
Each product in Shopify can have inventory tracking enabled:
- Navigate to Products > Product Detail Page
- Under Inventory, check “Track quantity”
- Optionally enable “Continue selling when out of stock”
This helps prevent overselling and allows Shopify to track how many units are available in real-time.
2. Multi-Location Inventory
If you manage inventory across multiple warehouses, retail locations, or fulfillment centers, Shopify makes it easy to track quantities per location.
How to Enable:
- Go to Settings > Locations
- Add each warehouse or retail outlet
- Assign inventory to each location when editing product details
Shopify will automatically allocate inventory based on location availability during checkout and fulfillment.
3. Inventory Transfers
You can move inventory between locations using Inventory Transfers, which helps balance stock based on demand.
Steps:
- Go to Products > Transfers
- Click “Create Transfer”
- Select origin and destination locations
- Add items and quantities
This feature simplifies internal logistics, especially when restocking or balancing warehouse supply.
4. Stock Alerts and Reorder Points (via Apps)
Shopify’s core system doesn’t include automatic low stock alerts or reorder point settings, but several apps fill the gap.
Recommended Apps:
- Stocky (by Shopify) – Advanced forecasting, reordering, and analytics (free with Shopify POS Pro)
- Low Stock Alert – Sends alerts via email when product quantity drops below a set threshold
- Reorder Master – Helps automate reorder workflows based on custom logic
These tools help ensure you’re never caught off-guard by unexpected demand.
Best Practices for Shopify Inventory Management
1. Use SKU Codes Consistently
Unique, consistent SKU (Stock Keeping Unit) codes help with:
- Internal organization
- Inventory syncing with third-party systems
- Faster product searches
Avoid using product titles or vague labels in place of defined SKUs.
2. Enable Inventory History
Shopify automatically tracks changes to inventory over time. Use this to audit stock levels or understand discrepancies.
View Inventory History:
- Go to Products > Inventory
- Click the product > View inventory history
You’ll see logs of manual adjustments, sales, restocks, and transfers.
3. Automate with Inventory Management Apps
For complex workflows or large catalogs, use third-party inventory management systems that integrate with Shopify:
Popular Options:
- Cin7 Core (formerly DEAR Inventory)
- SkuVault
- TradeGecko (QuickBooks Commerce)
- Katana
These tools offer batch tracking, purchase order management, supplier integrations, and more.
4. Bundle and Kit Products Strategically
If you sell bundles or kits (e.g., skincare sets, meal packs), you’ll need to manage inventory at both the bundle and component level.
Solution:
Use apps like Bundles.app or Connected Inventory to link individual SKUs to bundled products.
This ensures accurate inventory deduction when bundles are sold.
5. Conduct Regular Stock Audits
Even with automation, periodic manual stock checks are essential to catch errors and ensure accuracy.
- Schedule weekly or monthly cycle counts
- Audit high-value or fast-moving items more frequently
- Use Shopify’s printable inventory reports to assist the process
6. Leverage Shopify Reports
Depending on your plan, Shopify provides inventory reports to help you track:
- Inventory levels over time
- Days of inventory remaining
- Sell-through rate
Access via:
Analytics > Reports > Inventory
These insights support smarter purchasing, marketing, and restocking decisions.
Real-World Scenario: Managing Seasonal Inventory
Let’s say you run a Shopify store that sells outdoor gear. During summer, products like hiking boots and water bottles surge in demand.
With Shopify, you can:
- Use historical sales reports to forecast seasonal demand
- Set up low-stock alerts for hot items
- Transfer stock from your retail location to your online warehouse
- Run a bundle promotion for hiking packs + water bottles
- Use Shopify analytics to plan pre-season inventory purchases
The result: less overstock, fewer stockouts, and better customer satisfaction.
Conclusion
Shopify offers a powerful suite of inventory management tools that can handle everything from basic stock tracking to multi-location transfers and advanced forecasting (with the help of apps). Whether you’re just getting started or managing a growing ecommerce business, mastering these tools will help you stay organized, reduce waste, and keep customers happy.
By combining Shopify’s native features with smart inventory practices—like using SKUs, performing audits, and integrating with advanced systems—you’ll build a strong foundation for operational efficiency and long-term growth.
