As demand rises, Shopify makes it more difficult to manage orders and track stock levels across all sales channels.
Congratulations if you are at this stage. This is when most businesses look into inventory management solutions to their Shopify store.
Inventory management is also known as inventory control. It involves the acquisition, storage, and distribution of your stock through various platforms.
This involves keeping track of how much stock is left and predicting how many stock you will need based upon sales.
You can avoid common inventory distortion problems by having a solid understanding of inventory management and how it works.
What is inventory management?
Let’s suppose you have a french fry stall. You want to track sales, revenue, and project future sales in order to create a precise restocking schedule.
It is important to know how many potatoes are left, when they will go bad, how many french fries packs you have to sell and how many additional potatoes you have in case of an emergency.
It is hard to gather all this information without a system, especially when you have 10 stalls in the country.
You will end up either buying too many potatoes, wasting money on their going bad, or too few potatoes and losing money on sales opportunities.
You might even accidentally tell customers you have more storage. Then you find out that you are out of potatoes.
A good inventory management system can save you all the trouble.
This will allow you to track how many items (or stockkeeping units (SKUs ) are available across multiple locations and channels. You can also predict how many of each item you’ll need so you can decide when and how much you need to replenish.
Tracking inventory across your fulfillment network
A product inventory management process will show you how many of your products are in each of the fulfillment channels. It also tells you whether your supply chain is managed in-house or by third-party logistics (3PL).
Online stores allow you to store your products in multiple warehouses, so you can ship from a closer location.
Shopify Fulfillment Network is an example of a network of warehouses that can stock, store and distribute your product to various locations. It’s powered by Shopify.
Knowing how many items you have at each location will help you avoid disappointing customers and overselling.
Syncronizing inventory across channels
To catch attention in today’s online world you must be omnipresent. This means selling across multiple channels is essential.
It can be difficult to keep track of how many items to allocate to each channel and what items are left.
An inventory management system syncs data across channels and generates suggestions for stocking based on past data.
Let’s return to the french fry stall scenario and assume that frozen french fries are also sold on Amazon, eBay and your website.
An inventory management system allows you to sell all stock across all platforms, so instead of having to assign exact quantities to each platform (e.g., 11 kg to Amazon, 12kg to eBay, 18kg to your website)
The system then displays the total number of french fries left across all channels for every sale.
One sale on eBay will result in one less french fries per channel. Simple.
Reorder volume and timing
Worldwide, retailers lost 1.75 Trillion U.S. Dollars in 2015 due to stocking issues. This includes out-of-stock items or too many items that are not in season. Returns also played a role.
This is mainly due to the COVID-19 pandemic, which disrupted buying and predictions.
Stocking problems can lead to a loss in sales and negatively impact customer loyalty. Customers will switch to more reliable shops if they are always out of stock.
An inventory management system tracks all your items and lets you know when it’s the right time to buy more.
Inventory management apps can be used to inform your customers about how much stock is left for each item.
How important is inventory management for your store?
Effective ecommerce businesses require inventory management.
An inventory management system that is well-designed will give you insight into your inventory, and help you decide how often to restock each product.
You can keep track of your inventory turnover by using various inventory management methods. This will allow you to determine the correct stock amount for your warehouse and prevent dead stock.
This is particularly important for businesses selling seasonal items, such as winter coats or summer dresses, or perishable goods.
A system will save you time and money, and it will satisfy your customers.
Avoid overstocking and understocking
Shopify inventory tracking issues can cause ecommerce businesses to purchase excessive stock, resulting in cash flow problems or selling more products than they can sell.
Both of these issues can be equally detrimental to a brand’s reputation and bottom line.
37% of potential buyers will switch to a competitor if an item is out-of-stock. Repsly estimates that 70% of consumers will abandon their purchase if they see an out-of stock sign three times.
A inventory management system can help you deliver a better customer experience by preventing understocking .
This will allow you to tell customers how many products are in stock, and it will save your customer service team from constant back-and-forth communications with customers.
To map your supply chain operations, you can also calculate your order quantity (EOQ) within this plan.
Avoid selling too much
Imagine buying a plane ticket and then being told that your flight is full. The airport is a real drag.
It is frustrating and it hurts customer loyalty and customer satisfaction .
You will want the seat if you are promised one in return for your money. If an airline is unable to keep their promise, it can tarnish their reputation and decrease your trust in them.
Overselling can lead to angry customers as well as a bad reputation for your business.
You can avoid any backlash from not fulfilling promises by tracking your SKUs through inventory management and displaying the status on your distribution channel.
The system can help you forecast and track sales. It will also help you determine how much inventory you will need for different times of the year.
It is now much easier to see how your inventory changes over time and how seasonal demand changes.
Multiple channels available for sale
Tracking and fulfilling orders manually is easy when you are just starting.
Imagine trying to sell frozen foods, such as nachos and fries, chips, dips and popcorn. These items are stored in different warehouses all over the country, on Amazon, eBay, local physical stores, and your Shopify site.
As your business grows, it becomes increasingly difficult to scale fulfillment and meet customer demands.
Inventory management can also be a nightmare. Businesses that do not have a system in place for tracking all orders and sales through various channels are unable to manage them.
They are also unable to see how sales and orders impact their inventory.
A inventory management system will enable you to easily manage all of your sales channels , and ensure that every channel has enough stock.
Cash flow management
Inventory management allows you to see your cash flow and assets in a clear way. This will allow you to make better decisions about how much stock you should invest or how much you should budget.
By managing your inventory efficiently, you can save money on storage and buy only what you need.
This will allow you to make informed business decisions about how to use warehouse space, when to stock products, how to price products and what products to discontinue stocking.
This will enable you to spend more money on marketing and customer acquisition.
How does Shopify manage inventory management?
Shopify has many merchants.
Smaller merchants can use Shopify inventory management apps to manage their inventory and their sales channels.
Enterprise merchants often employ an IT team and an enterprise-level resource planning (ERP), which they use to manage high volumes of sales and restocks.
Growing and mid-sized brands often use a combination of integrations to balance out their sales channels with different fulfillment solutions.
What is Shopify’s inventory management app?
An automated digital tool, the Shopify inventory app, manages Shopify inventory tracking.
There are two main types of inventory management systems: automated and manual.
Manual vs. automated inventory system
You can track sales by manually updating your spreadsheets every time you make an order.
Shopify’s product inventory app automates the process with minimal input.
Even if you are able to track inventory manually, it leaves more room for error and wastes time entering data manually.
The right inventory management app will allow you and your team to free up time so that you can focus on the most important aspects of your business.
Shopify Inventory Management App: Why do you need it?
An inventory control app can help you automate and streamline inventory management, reallocate and save resources, and forecast trends.
Employees won’t have to spend large amounts of time manually tracking inventory, which will increase productivity and accuracy.
If you are looking for inventory management apps, then you should consider one.
- You should spend a lot of time managing your inventory
- Frequently run out of stock, or products are sold out frequently
- It can be difficult to track and update stock levels across your sales channels.
What should you look for in an inventory management app from Shopify?
There are many inventory management apps available, each with its own unique features, advantages and disadvantages.
The best inventory management software ecommerce offers detailed online store inventory tracking, auto generated product orders, integrations to other apps, and a comprehensive dashboard.
You should choose the app that has these features:
Comprehensive and detailed inventory tracking
Tracking and fulfillment information should be available. You will also receive notifications when additional stock is needed.
You should look for an app that accurately tracks your inventory and updates you within minutes of sales to prevent overselling.
Integration with other apps
You should be able to use the inventory app that you have chosen with other apps.
An application that integrates with Shopify Warehouse is what you want. Integrations with accounting tools, website ecommerce tools and POS systems are important components of your tech stack.
Sales forecasting capabilities
Forecasting sales is complicated because of many variables. However, an ecommerce inventory management application should provide a rough projection of market trends as well as growth rates.
Some applications can automatically generate purchase orders (POs) when an item is out of stock. They also predict the reorder quantity based upon sales forecasts.
A POS integration
If you sell in a physical shop, a POS integration is essential.
This will enable you to sync online orders and stock levels between in-store and online stores. It also ensures that there are no stock discrepancies in offline and online sales channels.
Inventory analysis and reports that are actionable
You should have reports and inventory analysis tools in your app that are relevant to your inventory management method.
You can customize various reports that the app generates in real time.
Top 10 Shopify inventory management applications
You might be asking yourself, “What application is best to track inventory for a store?”
Let’s take a look at the top Shopify inventory management apps, their features and best uses.
1. Stock Sync
Stock-Sync is Shopify’s most downloaded inventory management app. It has more than 900 5-star reviews and is the most highly rated app in its category.
Features Thousands Shopify stores use Stock Sync for automatic inventory updates, product pricing manipulation, managing multiple suppliers, exporting inventory and synchronizing to vendor websites.
The app allows retailers to sync their inventory with their physical stores through a variety of methods. It also supports scheduled inventory updates.
Cost Stock Sync offers a free plan with a 14-day trial. Paid plans start from $5/month
Ideal for:Growing companies that are looking to add more SKUs into their catalogs. Stock Sync is also useful for empty stores.
Skubana was acquired by 3PL Central and is called “The Operating System of Commerce”. It integrates with major sales channels such as Amazon, eBay, and Walmart.
Features Skubana provides multi-channel inventory management, sophisticated multi-warehouse demand forecasting and automated purchase orders.
Dynamic analytics in the app can reveal seasonal trends and calculate each SKU’s true profitability, helping you to lower expenses and increase your bottom line.
Price: This app has a unique pricing model that requires a minimum of $1,000/month.
Best for: Businesses that sell on multiple channels.
GoDaddy acquired Sellbrite to help Shopify merchants sell products on the most popular online marketplaces like Amazon, eBay, Etsy, and Etsy.
Features Sellbrite automates inventory synchronization across all channels in order to avoid overselling.
It integrates with Fulfillment By Amazon and supports multiple warehouse locations. Sellbrite gives businesses access to a central fulfillment interface that allows them to manage all orders and fulfill them.
Cost: Shopify offers a free plan that allows you to place up to 30 orders per calendar month. The $99/month rate is for orders up to 2000.
The best: Merchants that sell more than 2,000 orders per month.
Stocky can be integrated with Shopify POS Pro for managing purchase orders, forecasting and other functions.
Features Stocky has many advanced features such as demand forecasting, stock updates and stock transfers.
Its ability to forecast demand is amazing. It can forecast demand based upon seasonal trends and provide specific suggestions for purchase orders.
Stocky can also give forecasts based upon recent performance. This is done by reviewing your most recent orders and sales performance. This forecast is useful for both seasonal and new products.
Cost The application can be installed for free with a Shopify POS Pro subscription.
Best for – Merchants who sell on Shopify using a Shopify Pro subscription.
Features ShipHero allows merchants the ability to sync inventory across all channels and to implement automated rules to decrease manual tasks. ShipHero includes advanced reporting, barcode support and batch order processing.
ShipHero supports kit creation, cycle count, merged orders notifications and multi-warehouse inventory control.
Cost – ShipHero’s plans start from $1,850/month and include five users, 10 stores, unlimited SKUs, and unlimited SKUs.
The best for merchants who manage their warehouses and use ShipHero to fulfill their orders.
Pipe17 connects your back-end and front-end features. You have greater control over your fulfillment cycle, vendor services, order and inventory flows, and more visibility.
It can integrate with Shopify, WooCommerce and ZenDesk as well as other fulfillment and accounting platforms such Amazon MCF, eBay and ShipStation.
Features – Pipe17 connects your sales channels with fulfillment solutions. Pipe17 allows multi-channel selling and automated inventory management.
Software automates repetitive tasks so you can concentrate on your core business.
Cost: Monthly plans for Pipe17 start at $150/month (or $125/month if you pay annually) for 120,000 orders each year. For an additional $2,500/year, or $250/month, you can upgrade your plan so that there are 1.2M orders each year.
Best for Business owners who are looking for an integrated solution that is all-in-one and doesn’t require any IT team.
Katana, a manufacturing ERP with inventory management software, is a great option for stores that make their own products and not resell them.
Features Katana lets you manage your finished products, raw materials, and sales orders from one place. The visual dashboards make it easy to track your production and keep optimal inventory levels.
Price: Katana has two pricing options; Essential and Pro.
The Essential plan can be used for up to three warehouses. It costs $99/month and is billed annually. Each additional user will cost $29/month.
PRO plans are available for unlimited warehouses. They include extra features like batch/lot number tracking, floor-level mobile apps, and lot/lot number tracking. It costs $299/month plus $39/month each additional user.
Best for – Businesses that make their products.