Inventory management for Shopify sellers: A complete guide

Running a Shopify store is exciting, but let’s be honest, keeping track of inventory is one of the biggest challenges for eCommerce sellers.

One minute, you’re celebrating a surge in orders; the next, you’re dealing with overselling, backorders, sync issues between multiple stores, or piles of unsold stock collecting dust.

You’re not alone.

Poor inventory control leads to lost sales, higher operational costs, and unhappy customers, which are unsuitable for growth.

The good news?

Shopify sellers implementing innovative inventory strategies and automation tools reduce errors, cut costs, and improve order fulfillment.

With the right inventory management software for Shopify, you can sync stock levels in real-time, prevent overselling, and ensure customers always find what they need.

In this guide, we’ll explore the common inventory problems Shopify sellers face, proven inventory management strategies, and how tools like Sumtracker can help you streamline stock tracking and fulfillment.

Let’s dive in and take control of your inventory the smart way!

What is Inventory Management, and Why Does it Matter for Shopify Sellers?

Inventory management is the practice of monitoring, storing, and controlling stock so that the appropriate products are in stock at the right time. For Shopify merchants, having accurate inventory is essential to prevent stockouts, avoid overstocking, and optimize order fulfillment.

Lacking a sound Shopify inventory management system, companies risk losing sales because items are not in stock or tied up capital in unsold stock.

Studies further indicate that 34% of businesses ship orders late due to inventory mismanagement, which results in low customer satisfaction and business loss.

Utilizing inventory management software for Shopify assists with automating the tracking of stocks, syncing across multiple sales platforms, and avoiding expensive errors. Whether you only sell on Shopify or across the platforms of Amazon and eBay, automation guarantees the stock levels to be updated in real-time to avoid overselling.

Why Shopify Sellers Struggle with Inventory Control

Managing a Shopify store today is a wild ride, especially when keeping track of your inventory. It's not just about counting boxes but navigating a whole ecosystem. Here are the reasons why Shopify sellers tend to mismanage inventory

• Multi-Channel Discrepancies: Synchronizing inventory across platforms like Amazon and Etsy presents a significant challenge. Real-time updates are essential to overcome overselling and maintain accurate stock levels.
• Demand Forecasting Challenges: Predicting customer demand is complex due to seasonal trends and market fluctuations. Inaccurate forecasts can result in excessive stock or lost sales, impacting profitability.
• Data Entry Inaccuracies: Manual inventory tracking is susceptible to human errors, which can lead to incorectness. Inefficient picking and packing workflows also contribute to inaccuracies and delays in order fulfillment.
• Scalability Limitations: Manual inventory management systems prove inadequate as businesses expand. Scaling operations require sophisticated systems capable of handling increased order volumes and product variations.

Common Inventory Challenges Shopify Sellers Face

Inventory management is a problem for most Shopify sellers. Some of the most prevalent issues are:

• Stockouts and Overselling: Stockouts result in lost sales and overselling results in order cancellations and unhappy customers.
• Overstocking Problems: Excess stock holds back capital and incurs higher storage expenses, impacting business cash flow.
• Incorrect Tracking: Manual stock tracking causes errors, inconsistencies, and trouble maintaining real-time inventory records.
• Multichannel Inventory Complexity: Inventory spread across Shopify, Amazon, eBay, and more; without automated inventory tracking, Shopify causes mismatches.
• Supplier and Fulfillment Delays: Delays in restocking impact order processing and customer satisfaction.
• Seasonal Demand Fluctuations: Companies that don't accurately forecast demand either exhaust their inventory or hold unsold stock.

The Impact of Poor Inventory Management on Shopify Sales

Imagine if a customer finds the perfect item in your store, clicks "buy," and then... "Sorry, we're out of stock."

Not a great experience, right? Poor inventory management can seriously damage your reputation and sales.

• Revenue Loss and Customer Dissatisfaction: Stockouts mean missed sales opportunities. Customers might not wait for you to restock; they'll go elsewhere. Unhappy customers are less likely to return.
• Increased Operational Expenditures: Holding excess inventory means paying for storage and risking obsolescence. Stockouts can lead to expedited shipping costs to fulfill backorders.
• Reputational Damage Through Fulfillment Errors: Repeated stockouts or inaccurate order fulfillment can damage customer trust. Online reviews spread quickly, and negative feedback can take away potential buyers.
• Operational Inefficiencies and Resource Misallocation: Time wasted searching for misplaced items or dealing with backorders is the time you could spend growing your business.

Shopify Inventory management techniques you can adopt to streamline your store

Good Shopify inventory management is vital to maintaining a successful online shop. Here are five best practices Shopify sellers can follow to optimize their inventory management:

1. Inventory Management Software for Shopify
   Manually monitoring stock can result in inaccuracies and inefficiencies. Inventory management software for Shopify assists in automating stock updates, avoiding overselling, and synchronizing inventory across multiple sales channels in real time.
   If you are feeling confused about how to choose the right inventory management software, don’t worry. We have got it covered for you with a list of the five best such software.

2. Establish Reorder Points and Keep Safety Stock
   Set reorder points at minimum stock levels to trigger restock orders and maintain a safety stock buffer for unexpected demand spikes or supplier delays. This keeps your store stocked to fulfill customer orders.
3. Forecast Demand with Data-Driven Insights
   Accurate demand forecasting is critical to Shopify Stock Management. To forecast future demand, use past sales history, seasonal patterns, and customer buying habits. This will optimize stock levels and avoid overstocking or stock shortages.
4. Automate Purchase Orders and Supplier Management
   Automating supplier orders ensures timely restocking without manual intervention. With automated inventory tracking on Shopify, you can generate purchase orders automatically when inventory reaches a preset threshold, reducing the risk of supply chain disruptions.
5. Optimize SKU Organization and Product Bundling
   Maintaining an organized inventory enhances order fulfillment effectiveness. Organize products using SKU (stock keeping unit) codes and accurately track them. Moreover, providing product bundles can help sell slow-moving products while increasing the average order value (AOV).

Key Features for Shopify Inventory Management Software Selection

When selecting inventory management software for your Shopify store, it's crucial to focus on features that directly address the challenges of modern e-commerce. Here's a breakdown of essential features to prioritize:

• Real-Time Inventory Synchronization:
  Your software must provide up-to-the-minute visibility of stock levels across all your sales channels (Shopify, Amazon, eBay, etc.). This prevents overselling and ensures accurate stock availability.
• Multi-Channel Inventory Management:
  The software must be able to manage inventory across various sales channels and handle the complexities of the order lifecycle, including edits, cancellations, and refunds. This ensures consistency in stock levels across all platforms.
• Actionable Inventory Forecasting:
  The software should offer data-driven forecasting to help determine when and how much to reorder, minimizing stockouts and overstocking. This provides valuable insights into sales trends and inventory performance.
• Simplified Purchase Order Creation:
  Your inventory management tool must enable the quick and easy creation of purchase orders, facilitating efficient restocking processes. This will keep the team updated on incoming product arrival times.
• Comprehensive Reporting and Analytics:
  Must provide actionable inventory forecasting and display inventory data, cost values, and sales trends from all connected stores. This helps in data-driven decision-making.

5 best Shopify inventory management software

Are you not sure which Shopify inventory management software is best for you?

Worry not!

We have curated a list of the top 5 tools to help you easily manage your Shopify inventory.

1. Sumtracker- Best for Real-Time Inventory Syncing Across Multiple Channels

The top tool in our list is Sumtracker, which is an automated inventory tracking system designed for Shopify sellers who want to maintain correct stock levels across various locations and sales channels. It prevents overselling, updates stock in real-time, and automates restocking alerts.

Key Features:

• Automated inventory syncing across Shopify, Amazon, and other platforms
• Multi-location inventory management with real-time stock updates
• Low-stock alerts and auto-restocking reminders
• Bulk order and SKU management for organized stock tracking
• Seamless integration with Shopify for hassle-free inventory control

2. Extensiv: Best for Warehouse and Order Management

Extensiv is a warehouse and order management platform designed for businesses that need advanced logistics, fulfillment, and inventory tracking solutions. It caters to third-party logistics (3PL) providers, eCommerce brands, and omnichannel retailers looking to optimize warehouse operations.

Key Features:

• Automates warehouse operations for 3PLs and brands.
• Provides real-time order tracking and status updates.
• Helps 3PLs manage inventory for multiple clients.
• Syncs with ERP systems for streamlined business operations.

3. QuickBooks Commerce – Best for Accounting & Financial Tracking

QuickBooks Commerce (formerly TradeGecko) is an accounting and inventory financial management tool. It helps businesses track inventory costs, automate purchase orders, and manage supplier relationships.

Key Features:

• Tracks financials alongside inventory
• Automates purchase orders and invoicing
• Provides demand forecasting and analytics
• Syncs with QuickBooks Online for accounting automation

4. Katana – Best for Manufacturing & Production Tracking

Katana is a manufacturing inventory management software designed for Shopify sellers who produce their products and need to track raw materials, work-in-progress (WIP) inventory, and finished goods.

Key Features:

• Tracks raw materials and finished product inventory.
• Automates stock adjustments based on production schedules.
• Provides batch tracking and expiration date management.
• Integrates with Shopify and accounting software.

5. ShipBob – Best for Fulfillment & Shipping

ShipBob is a third-party logistics (3PL) provider that helps Shopify sellers streamline order fulfillment, warehousing, and shipping operations. It is designed for businesses that want to outsource logistics and focus on scaling their online stores without handling inventory in-house.

Key Features:

• Multiple fulfillment centers across the U.S., Canada, and globally.
• Fast shipping options for Shopify and eCommerce sellers.
• Warehousing solutions to reduce the need for in-house storage.
• Syncs with Shopify for accurate stock and order updates.
• Picks, packs, and ships orders without manual intervention.

Conclusion

Efficient Shopify Inventory Management is necessary to avoid stockouts, overselling, and overstocking. Without an organized system, manually handling stock can result in expensive mistakes and missed sales.

You can automate tasks and enhance cash flow by using inventory management software for Shopify, automating inventory tracking, and demand forecasting. Tools such as Sumtracker enable Shopify vendors to stay organized, synchronize stock in real time, and lower fulfillment errors.

Ready to grow your Shopify store with automated inventory tracking for Shopify?

Get started with Sumtracker today!

‍