How to Optimize Inventory Management Using Shopify

Shopify, one of the top eCommerce platforms, has billions of businesses utilizing its hosted cart solutions. Despite the platform’s continued dominance due to its numerous cutting-edge capabilities, there are still limitations for online retailers who are unable to make full use of the features Shopify provides them with, most notably Shopify’s inventory area. To ensure that you take full advantage, it is recommended to have a Shopify Development Company by your side.

Storeowners don’t have to carry out each of the tasks manually while using Shopify. Shopify is a top eCommerce platform that enables companies to sell online from a single dashboard and has tools built in to assist users to manage their inventory. You may monitor your supply from the Inventory area by:

Implementing inventory tracking
Changing inventory levels
Analyzing previous inventory changes and transfers

Shopify also offers a number of reports that might help you understand your inventory. You have access to information on:

The daily volume of items sold on Shopify.
Days of inventory remaining.
ABC analysis by product.
Product sell-through rate.
Percentage of inventory sold.

What are some benefits of inventory management using Shopify?

Cost-saving: You will save a ton of money by understanding what needs to be reordered and what doesn’t.
Decreased Risk: When you’ve got a successful system for handling your inventory, you know precisely which supplies and goods you have on hand for your shop, which lowers the likelihood that you will run out of anything or that you would stockpile items that won’t sell.
Increased earnings: By keeping track of the stock of all the items in your business, you may avoid placing unnecessary orders and consequently increase your earnings.
Increased Productivity: With inventory control in place, guessing is eliminated, resulting in an increase in productivity as you are aware of every item in your store.

Why Is Inventory Management for Your Shopify Store Crucial?

Avoid Deadstock in your inventory

Deadstock is goods that can no longer be offered to your consumers. It’s not simply that the product has run out of time; it may also be that it’s no longer in style or is out of season. Make sure to sell every costume before Halloween if you own a shop that sells Halloween attire. You can estimate your sales, monitor the inventory, and prevent the creation of deadstock by using inventory management.

Avoid Spoilage of products.

If you sell a product that might go bad as time passes or has an expiration date, your inventory may get spoiled, resulting in waste. For instance, if you sell a perishable food item, you might wish to use inventory management provided by Shopify to prevent waste. In these situations, knowing which product or component is about to expire is crucial.

Save Storage Cost

The number of goods you keep in a warehouse will affect your storage expenses. The fee increases as you store more. You may manage to order and sell by knowing the ideal number of items to have on hand thanks to inventory management. This will enable you to save a sizable sum of funds that you may otherwise be spending on unused warehouse storage.

Enhance Customer Experience

You can make promises to consumers regarding the things in your inventory and when they will receive them. By doing this, you may win over your clients and receive more favorable evaluations.

Optimize Cash Flow

An eCommerce store’s fundamental operation is as follows: you purchase an item from a supplier, keep it in stock, and sell it when a consumer places an order. Your eCommerce business only generates revenue when a customer purchases a product. Until the items are perfectly positioned in the inventory, you have no profit. In reality, it costs money to purchase and store a product in a warehouse. You may optimize cash flow with a good inventory management system.

Now to optimize cash flow, you may control ordering and selling items based on sales forecasts and estimates of when the stock will run out.

How To Build an Inventory Management System for Your Business?

Know In-Demand Products

When you launch a new eCommerce business, you must understand how the demand for your products changes throughout the course of the year. It’s critical to have a more accurate understanding of your monthly prospective sales.

Let’s imagine that you run a surfboard shop. Visit Google Trends to monitor changes in the volume of searches for the term “surfboards.” You may choose Sports as the Category and switch your web searches to Google Shopping to obtain more precise statistics. You may thus determine how to develop an inventory control strategy based on these forecasts.

Forecast Future Sales via Projections

You may easily look through your sales history to determine which month’s sales is particularly profitable for you if you have one. You may also seek occasions or holidays where sales are correspondingly higher. You may order and stock things in your stock before peak sales by doing this. By doing this, you may avoid running out of inventory and losing potential clients just when you need them. You can use the previously described Google Trends strategy if your shop is brand-new.

Prioritize Products With ABC Analysis

Three categories may be used to prioritize the current inventory using ABC analysis:

A: High-value items with infrequent sales.
B: items of a moderate value with occasional sales.
C: Products of low value with frequent sales.

The Pareto Principle, which states that 20% of buyers purchase 80% of all goods, is the foundation of ABC analysis. These clients make purchases of category A items. Customers that purchase product A are your main source of income, therefore you don’t want to lose them. Therefore, you must be aware of which items require the most care (A) and which ones require the least in order to establish a secure inventory management system.

Set Minimum Stock Levels

Your inventory’s threshold value is the minimum stock level. Every eCommerce store wants to know how little inventory they need to maintain on hand in order to quickly satisfy the demands of their consumers. Understanding how long it takes to restock your inventory when it falls below the required minimum stock levels is essential to having an effective inventory management system.

Let’s look at the best Shopify apps that can assist you with managing inventory for your Shopify business now that you understand what it is and how to create a good system.

Which Is The Best Shopify Inventory Management App?

Finding the best Shopify inventory management tool for a seller’s needs can take time and effort despite the abundance of options available. Don’t worry; here are some options which are ranked the best choices based on their costs, features, and more.

Stocky

Stocky is Shopify’s inventory management tool. Due to its capacity to manage both transfers of stock and demand predictions, this app is ranked on this list of the best Shopify inventory control applications.

Stocky’s cost:

Stocky has a monthly subscription fee of $29.

Some of Stocky’s standout features include:

Demand forecasting, which lets you manage your inventory holdings and prevent stockouts by using previous sales data to forecast demand for your items.
Management of purchase orders: Stocky helps you to keep track of supplier information, manage purchase orders, and make and submit orders straight from the interface.
Vendor management: To make sure you’re dealing with the finest suppliers for your company, you may monitor your supplier relationships, check lead times, and examine supplier performance indicators.
Inventory optimization: Stocky’s inventory optimization features let you spot slow-moving merchandise, come up with sales to move it along, and spot overstocked or out-of-stock items.
This cutting-edge toolkit automates and simplifies management procedures so that you never have to spend time or money correcting inventory mistakes.

Stock Sync

Apps for managing Shopify’s inventory include Stock Sync.

The application Stock Sync, a Shopify inventory management tool that streamlines the process of updating inventory, is next on our list. A 14-day free trial is available for the app. Users are able to switch to either of the subsequent plans:

The basic plan costs $5/month.
The pro plan costs $10/month.
The enterprise plan costs $49/month.

The salient attributes of Stock Sync are:

Integration: In addition to Shopify, Stock Sync has valuable third-party software integrations with Google, Quickbooks, and Dropbox. This implies that you may manage your inventory information and sales across numerous platforms from an identical dashboard.
Options for price: The Price Condition tool allows you to alter prices as you see fit. Additionally, this enables you to specify many pricing requirements for a single item.
Custom product classification: Stock Sync allows you to tag products with information for dynamic grouping. The best shop control is provided by this program, which offers the ability to assign product pricing, classifications, details, sizes, and even photos.

Final Words

Shopify helps the storeowners manage their inventory effortlessly, no wonder Shopify dominates the E-commerce market. For storeowners looking to optimize their inventory, switch to Shopify. We know it isn’t easy but you can hire Shopify development services for store migration or integration.