How to Use Shopify Inventory Management to Optimize your Every Day Business Operations

If you’ve got Shopify, the next step is to learn how to use its inventory management techniques to optimize your business operations. Once you work out your inventory management strategy, it could become the difference between who is more successful: you or your competitors.

That’s how important it is for eCommerce store owners. If you can’t identify your best and worst stock, or if you’re left with too much or too little of something, you can easily run into some pretty big problems.

Let’s take a look at how to use Shopify inventory management to optimize your day to day business. 

Shopify Inventory Management Helps you Organize your Products

Inventory management lets you neatly group your products by category, sale, season, price, type and so on. When you do this, automation becomes a whole lot simpler.

Shopify Inventory Management Helps you Organize your Products

This is lot less hassle than it sounds. Sure, it means you have to do more than just give each product a name and barcode, but by categorizing your products, you’re removing a major headache for both you and the customer. Everything becomes easier to locate and your shoppers find more of what they want.

Shopify Inventory Management Helps you Manage Product Variations

Let’s say you have a product that’s available in different colors. Unless you implement an inventory management system, managing all the variations will be difficult.

MightySkins sells Mavic Pro Skins in over 12 colors. On the left-hand side of the store, all of these colors are listed. These would have to be managed impeccably - or problems would arise when customers are ordering the same product.

Shopify Inventory Management Helps you Manage Product Variations

This is the case no matter what the product for sale may be. From lampshades that are available in an array of colors to jackets that are available in different materials.

Shopify’s inventory management allows you to manage all those variations of each of your products. You will stay on top of your inventory without confusion.

Shopify Inventory Management Helps you Track Counts

Imagine if a customer places an order for a product that you’ve actually run out of? It’s a nightmare scenario that can easily happen if you don’t have an inventory management system in place that comes with a tracking system.

Ask any customer (including yourself) and they’ll say that stock-outs suck. They’re a massive pet peeve and they can discourage customer loyalty and cause us to shop elsewhere.

Stock-outs aren’t exactly good for businesses either. It’s estimated that companies are losing a combined $634,000,000,000 every year because of them.

Customers understand that stock-outs happen, but what they don’t appreciate is when you fail to warn them about it. They make the order, excited about the new product they’re going to get soon, until they eventually learn that it isn’t even in the warehouse anymore!

What’s worse is that orders can be delayed for months. This can really kill the customer-store relationship. And yet all it takes is for you to implement a simple inventory management system to make sure this never happens to your store.

When you properly manage your inventory, you can keep a close eye on your fast sellers, which means you can restock them quickly. To do this, however, you need to make sure that you’ve built a good working relationship with your suppliers.

Of course, tracking your stock also means that you’ll want to put in minimum orders for certain items that take longer to sell. That’s fine but again you’ll need to build a strong relationship with your suppliers first as minimum orders can be negotiable.

Shopify Inventory Management Helps you Avoid Food Spoilage

If you sell food, there’s always the risk that you’re going to leave food that’s gonna past its best on your digital shelves.

Sound implausible? It can easily happen if you don’t implement an inventory management strategy. Manage your inventory and you can keep track of spoiled food so that you don’t ship items that have gone off. Which isn’t cool.

Orangeglad is a subscription-based service that delivers desserts straight to your door. Their selection of desserts ranges from cakes, cookies, chocolates and many more. They could never risk a spoiled item getting delivered to a customer, or they would lose their custom.

Shopify Inventory Management Helps you Avoid Food Spoilage

Shopify Inventory Management Helps you Eliminate Dead Stock

Dead stock doesn’t always have to refer to stock that has expired, such as food. It can also refer to stock that has simply gone out of fashion, such as clothes, or even season.

It happens, and unless you’re on top of your inventory, you could end up with crazy Halloween outfits still in your store in February. Be careful, because dead stock like this can make your brand look pretty bad.

Shopify Inventory Management Gives you Greater Insights Into What’s Selling and What Isn’t

If you had access to certain insights, such as which products are in high demand and which ones aren’t, you can then start to build better marketing campaigns.

Implementing an inventory management strategy gives you access to trends and sales to that you plan the right orders and build those better marketing campaigns. Without these insights, you might end up ordering the wrong products that aren’t going to sell in the next sales cycle.

Ask any store owner, be it online or offline, how hard they find it to forecast sales and they’ll tell you it’s difficult without a proper inventory management strategy. These are some of the things you’ll miss:

  • Promotions
  • Ad spend budget
  • Growth rate for this year
  • The amount of sales you made in the same week last year
  • Seasonality

Winning with an eCommerce store sounds like it all comes down to accurate forecast. In reality, it hinges on your inventory management.

Download a Shopify Inventory App

To help you manage your inventory, it’s a good idea to download an inventory app. There are lots available that are compatible with Shopify, and you can have a browse of the selection here.

Choose the app that’s right for you and you can transform your entire customer experience.

Download a Shopify Inventory App


Lastly, if managing your inventory yourself still sounds like a lot of hassle, you can always consider drop shipping. Drop shipping means that you don’t even have to carry an inventory, nor do you have to ship anything. Instead, the wholesaler does it all for you.

For everyone else who would rather retain more control over their store and products, and who don’t mind shipping their items themselves, use the advice in this article to stay on top of your inventory.

Written by Michelle Deery

Michelle Deery's picture

This is a guest post by Michelle Deery, a team member of Heroic Search in Tulsa. She specializes in writing about eCommerce and grows businesses through content marketing.

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