How to Effectively Manage Your Shopify Inventory

The eCommerce ecosystem is exponentially expanding in size and complexity, with powerful platforms like Shopify and Amazon spearheading the charge, using third-party logistics (3PL) to provide efficient services. As reported by Statista, the global 3PL industry has earned a stunning $951.6 billion in revenue with the United States’ 3PL market alone expected to break $297 billion by 2023.

Now, what do we mean when we talk about Inventory management? And, why is it so extraordinarily important? Let’s see!

Inventory management for Shopify stores involves the meticulous management of products to ensure that there is enough stock to balance supply and demand from the customers. This is highly important to guarantee the satisfaction of purchasers and make sure that your store is adequately equipped to handle any transaction. As a result, savvy store owners can take advantage of this and ensure an improved competitive edge. To make this more efficient, businesses are increasingly turning to Magneto to Shopify migration Services for seamless transition of their systems.

Best Advice for Managing Inventory on Shopify

Monitoring your inventory online is key if you aspire to recognize when you are running out of supplies and need to replenish things or want to dodge over-selling items you don’t have enough of. Customers will be grateful for your attention to detail and will reward your business with their trust and approval, enabling your enterprise to reach even greater heights with fewer hindrances. 

Shopify provides an impressive ‘Inventory’ tab specifically for this purpose.  

By religiously checking the ‘Inventory Reports’ on Shopify, you can observe the evolution of your sales numbers and make wiser choices. Furthermore, we also highly recommend you abide by these five tried-and-true tricks for managing your Shopify inventory to maximize the value of your venture.

Keep away from Dead Stock

It is an expensive drain on a company’s financials, and unfortunately, it’s something that can’t always be avoided. The best way to handle it is to try and make the most of it by bundling products, selling to liquidation retailers, or even donating it to charity for a tax write-off. 

Overall, however, the best plan is to keep dead stock from appearing in the first place. Employing analytics and the right software and tools to appropriately understand inventories and consumer behaviors is often key to this goal. Additionally, depending on the situation, you may want to err on the side of caution when introducing a new product or selling seasonal items, so that you don’t end up overstocked. Doing this will help minimize the damage significantly if those items don’t get the expected demand.

Reduce Your Storage Fees

When your inventory starts overflowing with products or when you end up with something that has little to no demand, this can cause your storage costs to dramatically rise. Managing deadstock is key in this situation, as it can really accumulate and become a financial burden. 

It’s important to watch your inventory closely and examine which products are moving swiftly and which ones are not. This information can help you come to wise decisions on what to stock more of and what to get rid of. Making sure your products move through your inventory quickly and efficiently is the most important factor here.

Increase Cash Flow

In order to keep your Shopify inventory optimized, make sure to closely monitor it. Following this will ensure your money is only being allocated to fast-moving products while also earning you revenue. Without rigorous inventory control, you could find yourself in a tricky financial situation with products not moving, tying up funds and accruing storage costs. 

Successful inventory management will exponentially increase your opportunities for growth. Make sure you are keeping tabs on every aspect of your inventory, like analyzing how successful items are performing and how certain products may be having a negative impact on cash flow. With this information, you’ll be able to decide which products are beneficial to your business and which need to be eliminated:

  • Month-end snapshot of inventory.
  • Negative numbers of inventory.
  • Daily average sales of inventory.
  • proportion of sold inventory.
  • ABC examination by item.
  • Ratio of product sales.
  • Days of remaining inventory.

Optimize Fulfillment

Struggling to locate a fulfillment partner that can keep up with your expanding business and changing requirements? If you’ve exceeded the capabilities of your 3PL, it’s essential to identify these signs and take the necessary steps to fine-tune your delivery process and please your customers.

Additional ways to optimize your Shopify 3PL fulfillment: 

  • Providing self-service options to your customers so that they can instantly see when and where their order is it will arrive.
  • Removing manual and time-consuming steps that impede the flow of your process. It can make a significant difference in time simply by eliminating minutes of laborious work on several tasks that can be performed by automation.
  • Acquiring appropriate software. Software tools are made to make it easier for you to make decisions over and over again, cut down on human error, and get the most out of your process as a whole. You will be able to maximize your fulfillment to its fullest extent if you take advantage of that.

Keep up with the Best Sell-Through Rate

Discounts and promotions alone cannot guarantee achieving the desired sell-through rate because evergreen products do not always sell as quickly as seasonal products do. Pay attention to the Product sell-through rate report provided by Shopify to get a better idea of what you’re selling. This report will help you understand the percentage of your total inventory that has been sold over a certain period of time, which should be pretty close to real-time.


Finally, effective inventory management is essential to the success of your Shopify store. Monitoring your inventory carefully, freeing your business of unsold products, cutting down storage costs, boosting cash flow, streamlining fulfillment, and staying within the ideal sell-through rate, can enable you to have the ideal level of stock to satisfy customer needs, minimize overhead expenses, and achieve your maximum potential in the digital realm. With the correct tools and methods in place, you can remain one step ahead of the competition and foster a dependable customer base that will push the growth of your business forward.