In retail, having excellent customer service and a product that people love is only half the battle. Plenty of promising retailers have hit a wall or gone completely under because they weren’t prepared to manage their inventory at scale.
That’s why so many turn to ecommerce platforms like Shopify.
Shopify is designed for both ease of use and scalability: the platform can handle many aspects of digital ecommerce out of the box, from a branded online shopping experience to payment processing and order management.
Yet, as with any ecommerce platform, there are certain challenges that accompany Shopify inventory management. And as any experienced ecommerce retailer who’s used the platform knows, any inventory inefficiencies—big or small—can have massive impact on the customer experience.
1. Eliminate manual processes
High volume and manual inventory management do not go together well. In our experience working with high-growth retailers, the entry-level Shopify plans don’t always allow for enough robust automation of key inventory processes.
Though our own inventory management software works quite well with both Shopify and Shopify Plus (RetailOps + Shopify API = 💚), we recommend upgrading to Shopify Plus and considering strategic processes that enable scalable automations and multi-site, multichannel management. The sooner you can move away from Excel spreadsheet templates, the sooner you can unlock the real growth you’re looking for.
2. Prioritize order management
For larger retailers, managing a high volume of orders across multiple channels and locations is a challenge that, if not properly managed, can compound as more and more orders come in. Here’s a few key areas to keep in mind:
Order tracking – The first thing customers do is check the status of their order (they just bought their shiny new thing and they want it now). No matter the delivery date, customers expect up-to-the-minute information that’s easy to access. Make sure to give it to them!
Returns – Quick quiz: you’re using an ecommerce platform like Shopify and you receive a return—who processes the refund payment, you or Shopify? Processing returns, refunds, and exchanges can get clunky on Shopify without some way to seamlessly automate the process. The same goes for order discounts and cancellations, which should not be overlooked as potential sources of friction.
Order routing – Larger operations shipping from multiple locations (physical brick-and-mortar locations or warehouses) will benefit greatly from automations that determine how to fulfill an order in the most cost-efficient way possible. With cost-based routing, all the guesswork and gut feelings are removed, which leaves only fact-based automated business logic left to do the heavy lifting. This helps with order processing, delivery estimates, slimmer operations, and overall customer satisfaction.
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3. Focus on list management
Putting all of your products in a single catalog, managing product data (attributes, media, etc.), and getting those products in front of paying customers is easier said than done. But list management on Shopify is essential to retail success.
Have a system of record – If there’s one thing you take away from this post let it be this: good data is king. It doesn’t matter if you’re selling on one Shopify site or hundreds—having an external repository for all your product data is important. As you grow and add on channels it will become painfully obvious that bad data can cripple your operations as you scale.
Knowing what SKUs are available for sale, the metadata that goes along with each (price, description, images, etc.), where it’s being sold, and current inventory levels is key to an efficient operation. Having an automated system of record that updates all channels when any change occurs across your organization will create huge wins for your shop.
Out of stock items – You can avoid a lot of headache, inventory discrepancies, and lost business by hiding out of stock items in your Shopify store. Because guess where customers take their money when they can’t find an item in stock? Amazon.
En route inventory – Out of an item but more are on their way? Leverage that data and make that item sellable before it even lands at your docks so it can be immediately fulfilled once received. The benefit of using en route inventory as a data point is you’ll know exactly how much you’ll be receiving and when it will be received.
Using this information you can set customer expectations accordingly with a longer estimated ship date or estimated delivery date. It’s an overlooked strategy for most smaller retailers, but most large retailers can’t live without it.
4. Be prepared for highs, lows, and sudden spikes
To a great extent, the retailers that thrive are those that future-proof their inventory. There’s seasonal swings, sudden spikes, or even manufacturer-side shortages. To this end, reporting and forecasting are essential to any Shopify inventory management model.
Reporting and forecasting can help you plan for the future, anticipate and absorb “sudden change” and fluctuations in demand. In the end, you’ll be saving yourself and your customers a lot of headaches.
5. Perform regular audits
Even highly automated ecommerce businesses require regular inventory counting. In addition to tried-and-true methods like physical counts and cycle counting, you can also use stock alerts for more advanced inventory optimization.
Stock alerts can help you make sure you don’t run out of stock at specific locations. It can also inform the decisions you make about prices changes. You can even leverage certain inventory changes (low stock, for example), to your advantage. Shopify has a detailed blog post about using stock alerts.
6. Find the right inventory management integration
Shopify does a lot, but it doesn’t do everything. Our sixth and final tip (little surprise here) is to find an inventory management solution that seamlessly integrates with your Shopify store. Think of it as a full operations suite—a place where you can manage all inventory ops from a single software instance.
Integrated Shopify inventory management offers a number of advantages:
- See where your inventory is across all your stores, warehouses, etc.
- Set up and manage virtual warehouses from a single place
- Get instant updates to inventory levels up and down the chain (across all of your Shopify sites)
- Avoid oversells that frustrate customers and turn them away
- Accommodate dropshipping, just-in-time, and other fulfillment methods
Maybe the best tip for Shopify inventory management we can give you is that every detail across the customer journey—from order creation to shipping to returns and refunds—matters. It matters to the efficient operation of your business. It matters to your bottom line.
Most of all, it matters to your customer.
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