If you own a Shopify store, keeping inventory in check can be an incredibly tedious task.
Fortunately, with the right strategies and processes that streamline operations, it doesn’t have to stay this way!
Our definitive guide gives store owners invaluable tips on effectively managing their Shopify inventory.
We’ll give you data-driven solutions for tracking and reporting essential information as well as tactics for optimizing storage space and reducing stock waste – so that you can focus on what matters most: running your business efficiently.
Why it is important to effectively manage your Shopify inventory
The importance of effective inventory management for Shopify store owners cannot be overstated. With an optimized approach, you can ensure your customers experience a reliable shopping experience that also streamlines your operations and cuts costs in the process.
Through effective inventory management, store owners can save money through a better understanding of stock trends, more efficient use of existing stock, and fulfillment of incoming and open orders.
Being able to accurately keep track of inventory levels is critical in preventing out-of-stock items, which research shows can hurt the customer experience by a whopping 30%.
Additionally, tracking and forecasting allow you to take advantage of dynamic pricing strategies to maximize profits without sacrificing quality or service.
An effective inventory strategy not only saves time and money; it reduces wastage and optimizes storage, too.
Achieving this requires highly organized data collection and analysis – which is difficult to do manually – so having a comprehensive software system in place is essential for optimizing your Shopify inventory management process.
Common mistakes people make when managing their Shopify inventory
Managing inventory for Shopify stores is a complex and time-consuming task.
Despite the best of intentions, it can be easy to make mistakes that end up causing unnecessary waste and frustration.
Here are some common errors people make when managing their Shopify inventory:
- Inconsistent Tracking: Not tracking stock levels accurately or consistently can lead to inaccurate data over time and could lead to lost sales
- Inaccurate Data: Tracking incorrect information such as part numbers, SKUs, or product descriptions can cause confusion down the line when fulfilling orders
- Not Labelling Properly: Not properly labeling items with precise characteristics, locations, sale prices, and more can be confusing and costly
- Not Tracking All Items by Location: If you’re not tracking all items in all locations, it’s impossible to know how much product you actually have
- Locations Are Unorganised: Without an organized system for locating goods and equipment, it’ll be difficult to find any item when needed
- Processes Are Too Complicated: Having overly complicated processes due to manual entry of data into multiple systems is an inefficient way of managing your inventory
- Incorrect Inventory Layering: If goods are not separated according to purchasing cycle, then waste will quickly occur
- Incorrect Part Number: Entering the wrong part number into the system will result in incorrect orders being sent out, resulting in returns
- Cycle Counting Adjustment Error: Product counts may be incorrect due to miscalculations made on a regular basis; these must be kept up with if accurate stock levels need to be maintained
- Customer-Owned Inventory/Consignment Inventory: Failing to track customer-owned inventory or consignment inventory correctly can lead to disputes between parties
- Improper Cutoff: Doing cutoff without proper planning may mean surplus goods turn into wastage
- Transfer Imbalance: Failing to balance transfers accurately will result in stock discrepancies
Strategies for Managing your Shopify Inventory
Shopify makes it easy to manage your inventory and keep track of sales, but there are still some strategies you can use to make sure you’re getting the most out of your stock.
Here are some tips for optimizing your inventory management:
Inventory Tracking and Reporting
Using ERP software designed specifically for inventory management is one of the best ways to ensure proper tracking and reporting.
The software will provide real-time data so you can see what you have in stock at all times, no matter the size or location of your shop.
Calculating Re-order Points
Re-order points let you know when it’s time to replenish stock. This allows you to stay ahead of customer demand and always make sure enough product is available.
Using a program or app that automatically calculates re-order points can save you time while also reducing waste.
Ensuring Enough Stock is Available at All Times
In order to avoid running out of stock, it’s important to always keep an eye on current inventory levels. Make sure that minimum balance limits are set correctly so that you never run low on any item that could be causing a bottleneck in production or sales.
Optimizing the Storage of Inventory
Organizing your inventory storage space is key to successful inventory management.
Using vertical space as much as possible by utilizing racks, shelves, bins, and other systems that help maximize storage options without taking up too much floor space.
Reducing Waste of Stock
It’s important to practice preventive measures in order to reduce waste from expired or discarded items.
Implementing expiration dates for certain products will give employees timely deadlines for completing orders and improve overall accuracy in the warehouse.
Use ERP Software Designed for Inventory Management
A powerful piece of software like an enterprise resource planning (ERP) system can take inventory management from a manual process into something completely automated and streamlined.
Automating processes such as ordering and restocking helps free up more time so that businesses can focus on more important tasks instead of worrying about their supply chain issues.
Data Analytics To Optimize Inventory Management Data
Data analytics tools help companies analyze past performance so they can predict buying trends in order to better manage their circumstances accordingly and optimize their resources based on customer demand patterns rather than guesswork or assumption-based planning models.
Forecast Effectively With Sophisticated Planning Tools
Forecasting tools enable a business’s ability to predict how much stock they need at any given moment, thereby allowing them the opportunity to plan ahead with confidence, cut down costs by avoiding overstocking or understocking scenarios, as well as increase overall efficiency across all levels by providing reliable data for informed decision-making purposes.
Integrate Mobile Technology
Introducing mobile technology into warehouse operations allows managers who don’t have access to computers at all times to access real-time data related to inventory flow, shipments received/sent out, etc., thereby enabling them to take prompt corrective action if required.
A List of Shopify Apps That Help With Inventory
To ensure a profitable online store, effective inventory management is essential, and Shopify offers superb applications to facilitate the process.
Automation of duties as well as tracking products in real-time, are only some of these top tools on Shopify that will help you attain an efficient yet rewarding inventory experience.
- Back in Stock: Restock Alerts
- Hextom: Bulk Product Edit
- Pre‑Order Now WOD
- Stock Sync: Connect Suppliers
Inventory management is an important part of running a successful Shopify business.
Effective inventory management requires tracking and reporting, calculating re-order points, ensuring enough stock is available at all times, optimizing storage space, reducing waste of stock, using ERP software for inventory management, using data analytics to optimize decisions, forecasting tools for planning purposes, and integrating mobile technology.
By using all of these strategies, retailers can ensure that their supply chain is running smoothly and efficiently and that customers are always able to get the products they need when they want them.
With the right strategies in place, any Shopify business can become an inventory management success!