Shopify

Best Inventory Control Technique For Shopify Business

Which is the best inventory management technique for your Shopify Business?

Inventory Management for Online Businesses

shopify inventory management system

Inventory Management is how businesses and brands organize, control and manage their tools across the supply chain.

Regardless of the size of the business, or the volume of operations it has, all retailers need inventory management systems in order to streamline the process.

Inventory management also plays a vital role in having accurate books, so when tax season rolls around, you can ensure that you have accurately documented all of your income and expenses and can file your taxes with relative ease. Having a successful business can ensure that you have a sound financial plan for your future and can manage your investments wisely.  

All inventory management systems are required to help organizations maintain consistent stock levels in order to hedge the risk of delayed order fulfillments, or eventual customer losses. In today’s day and age, Customer Acquisition Cost tends to be one of the primitive causes of concern for all e-commerce businesses.

However, in order to keep acquisition cost to the minimum, inventory management needs catered to by all businesses alike.

shopify inventory management system

Shopify Inventory Management

Shopify inventory management sounds very techie – but let us break it to you. It really isn’t. 

Shopify Inventory Management is just making sure that inventory and stock levels of the online business are aligned with the physical presence of the goods and/or the availability of these goods when the need arises. 

The main goal in this regard, for all business owners alike is to make sure that the inventory management system is sufficient enough to maintain consistent stock levels, thereby making order fulfillment a lot easier. The common mistake that business owners tend to make in this aspect is improper integration of their manual frameworks with Shopify’s system, that makes it difficult for them to optimize inventory holding costs.

Is Inventory Management really important for all Shopify and ecommerce stores?

All business need inventory control. Period. 

Particularly in the case of Shopify stores, inventory management holds tantamount value because there is a time lag between order creation, and order fulfillment. Therefore, from the perspective of online stores, inventory control systems hold even a greater degree of importance. Here’s why:

  • Reorder point: For online businesses, it is important to ensure that they are able to have an idea about when would they need to reorder a certain item in their inventory.

  • Reorder quantity: Businesses should also make sure that they are aware of the optimal quantity that should be ordered. There is a trade-off between ordering costs, and holding costs, and e-commerce businesses need to make sure that they are able to strike the perfect balance.

  • Discrepancy in virtual inventory versus physical inventory: Shopify “>has a built-in inventory management tool that helps business owners to keep a track of their inventory. However, since that is reliant on manual data entries, the overall risk of error is quite significant.

    Therefore, having a proper inventory management system would integrate all supply chain nodes, thereby making it easier for businesses to manage their inventory with relative ease. 

Inventory Control vs Inventory Management

Inventory Control is contained within inventory
management, but there are slight differences that need to be accounted for.  Inventory control simply refers to the process of regulating, monitoring, and handling inventory that is already present within the store, whilst inventory management broadly encompasses demand forecasting, ordering, and inventory inflows. 

best inventory techniques

Best techniques for inventory control for a Shopify business

There are numerous ways in which business owners try to ace Shopify Inventory Management. However, it is also important to understand that one size fits all approach normally doesn’t work under all circumstances. Having said that, there is a sigh of relief on the part of business owners knowing that the issues they are experiences have already been experienced by several different business owners earlier. 

When it comes to the best techniques for inventory control and overall inventory management in Shopify, it is critical to be aware of tools and software that are available to ensure a streamlined order flow process. There are several different applications designed specifically for the cause, and here’s an overview about some of the best applications that can be used by business owners for Shopify Inventory Management:

  • Inventory Planner: Inventory Planner is one of the best reviewed tools that can be integrated into Shopify. The unique selling proposition (USP) that sets this tool apart from others is the fact that it has an integrated automatic replenishment recommendation. It simplifies the inventory ordering process, as well as speeding up the reordering process, and hence reducing lead times. Additionally, it also helps businesses to forecast sales trends in a matter of seconds, so that business owners can take charge of inventory control, and ensure simplified results. 

  • SkuVault: This inventory management software designed by SkuVault aids online businesses to sell, pick, and ship faster. The main goal of this app is to ensure that the shipping experience achieved by businesses is streamlined, and smooth. The reason behind this software is regarded as a pivotal tool in Shopify
    Inventory Management. It connects all channels, and organizes the warehouses, as well as inventory management with simplified workflows.

  • Inventory Source: This is primarily for retailers who work on a drop shipping model, as well as an integrated supplier network. Using this software, business owners can automatically upload products, sync their inventory levels, as well as route orders with dropship suppliers – all integrated within the Shopify Store. 
shopify inventory

How to choose the correct inventory management software

As per the research conducted by Wasp, as many as 43% businesses rely on manual methods to manage their inventory. This largely increases their exposure towards inventory losses as a result of human error. Therefore, at some point in time, business do eventually realize the underlying importance of these software.

But how does a business decide which software is best for managing their running inventory?

It’s something that can be addressed by opting for software that can not only analyze data in real-time, but also optimize their inventory management. 

Ideally, the chosen software should have the capacity to take overstocking, and understocking into account, in addition to predicting sales specially in case of seasonality within the sales volume. Hence, the primitive objective of the chosen software should be to ensure that it helps business owners to make the necessary adjustments regarding products within the lifecycle of the product. 

Integrating all these software into the system can marginally help online businesses enforce inventory control across orders spanned over different physical locations.

Best Practices for Inventory Management for Shopify Business Owners

Here are a couple of best practices that are adopted by most online business owners to ensure that their inventory management hits the right nodes that might help them to extract higher profiles. These techniques are as follows:

  • Keeping an inventory of safety stock: As a generic rule of business, it is important to always maintain a safety stock of inventory. This would help businesses to get a reasonable lead time, between the reorder time, and the time where the inventory is actually delivered to the business.

  • Balance inventory: One of the foundations of inventory management is to strike a reasonable threshold of inventory that can help businesses to understand the optimal inventory level they should maintain. Also referred to as the Economic Order Quantity (EOQ), this helps business to maintain their inventory ordering, and holding costs to a minimum.

  • Using a kitting technique: Kitting techniques are widely used by numerous e-commerce businesses to make sure that they are able to get riddance from overstocked items. Naturally, stocks that have a low turnover tend to incur a holding cost. In order to mitigate that, it is important for businesses to have an understanding regarding their inventory flows, subsequent to which they can decide to ‘kit’ their products, and have an optimal ordering quantity. 

  • Looking at past purchases to predict sales: Predicting the future sales with a reasonable level of assurance tends to make inventory management, and control a lot easier. It is imperative for businesses to make sure that they are able to get a better grasp of consumer behavior, based on which they can make decisions for the greater good of the business.


    A lot of e-commerce business on Shopify are reliant on perpetual inventory updates. This creates a tendency for business to overlook the importance of inventory audits. However, it must be understood that inventory audits need to be conducted on a periodic basis (i.e., physical audits) in order to ensure that there is no discrepancy between the actual inventory on hand, and the inventory calculated by the system.

inventory management guide

The Takeaway

The importance of a sound inventory management software for Shopify cannot be stressed upon enough. It is extremely important to make sure that inventory controls are in place to help the business scale and grow over the course of time.

While one size fits all approach might not work here, it is always best for Shopify store owners to make sure that they are fully aware of the software that can potentially help them maintain and manage their inventory in a better manner. 

The best technique, would therefore be to make sure that businesses are able to integrate the apps and software that work best for them. They can get an understanding about these tools and their applications as they continue to use these products.

Tags : 

bookkeeping,ecommerce,inventory,inventory management,shopify,Shopify Inventory
Share This :

Leave a Comment

Your email address will not be published. Required fields are marked *