Inventory Basics
Shopify's inventory system tracks stock quantities for each product variant across all your sales channels and locations. When a customer purchases an item, the inventory count automatically decreases.
Understanding how Shopify handles inventory is crucial for avoiding overselling and maintaining accurate stock levels across your entire operation.
Key Inventory Concepts
- •Available quantity is stock that can be sold to customers
- •Committed quantity is stock reserved for unfulfilled orders
- •On hand quantity is the total physical stock at a location
- •Incoming quantity is stock expected from purchase orders
Tracking Stock Levels
To enable inventory tracking for a product, you need to configure it in the product settings. This can be done individually or in bulk.
Enable Inventory Tracking
- 1Navigate to Products
Go to Products in your Shopify admin and select the product you want to track.
- 2Find Inventory Section
Scroll to the Inventory section and check "Track quantity" for each variant.
- 3Set Initial Quantity
Enter your current stock quantity for each location where you hold inventory.
- 4Configure Selling Behaviour
Decide whether to "Continue selling when out of stock" or stop selling when inventory reaches zero.
Pro Tip
Enable "Continue selling when out of stock" only for products you can quickly restock or dropship items. For limited stock products, keep this disabled to prevent overselling.
Multi-Location Inventory
If you store products in multiple warehouses, retail locations, or fulfilment centres, Shopify's multi-location inventory feature keeps track of stock at each location independently.
Setting Up Locations
- 1.Add locations: Go to Settings → Locations and add each warehouse or store
- 2.Set fulfilment priority: Drag locations to set the order Shopify uses when fulfilling orders
- 3.Assign inventory: Specify which products are available at each location
- 4.Configure apps: Enable third-party fulfilment apps for specific locations
Location Limits by Plan
Shopify Plus supports up to 200 locations
Low Stock Alerts
Shopify does not include built-in low stock email alerts by default, but there are several ways to monitor inventory levels and get notified when stock runs low.
Inventory Reports
Use the "Percent of inventory sold" report in Analytics to identify fast-moving products that need restocking.
Third-Party Apps
Apps like Stocky, Stock Sync, or Low Stock Alert can send email or Slack notifications when inventory drops below a threshold.
Shopify Flow
Shopify Plus merchants can use Flow to create automated workflows that trigger notifications or actions based on inventory levels.
Inventory Adjustments
Regular inventory adjustments ensure your Shopify stock counts match physical inventory. This is essential after stocktakes, receiving shipments, or accounting for damaged goods.
How to Adjust Inventory
- 1Go to Inventory
Navigate to Products → Inventory in your Shopify admin.
- 2Filter by Location
Select the location where you need to adjust stock.
- 3Make Adjustments
Click on the quantity and enter the new number, or use the adjustment column to add or remove units.
- 4Add Adjustment Reason
Select a reason (correction, damage, received, etc.) to maintain accurate records.
Inventory Reports
Shopify provides several inventory reports to help you analyse stock performance and make informed purchasing decisions.
Month-End Inventory Snapshot
Shows inventory quantities and values at the end of each month. Essential for accounting and tax purposes.
Percent of Inventory Sold
Identifies your fastest and slowest moving products. Use this to optimise purchasing and identify dead stock.
Average Inventory Sold Per Day
Helps calculate reorder points and forecast when stock will run out based on current sales velocity.
ABC Inventory Analysis
Categorises products by sales contribution. A items are high-value, B items are moderate, C items are low priority.
Best Practices
Following these inventory management best practices will help you maintain accurate stock levels and optimise your operations.
Inventory Management Tips
- •Regular stocktakes: Conduct physical counts at least quarterly to reconcile Shopify with actual inventory
- •Safety stock: Maintain buffer stock for best-sellers to prevent stockouts during demand spikes
- •SKU system: Use consistent SKU naming conventions that include product, size, and colour information
- •Reorder points: Set reorder levels based on lead time and average daily sales
- •Dead stock review: Regularly review slow-moving items and plan clearance sales
