Running an online store on Shopify is no walk in the park. Between stocking shelves, filling orders, and keeping customers happy, things can get hectic fast. But here's the truth - the stores that come out on top don't just wing it. They master inventory management.
Inventory management is what transforms normal operations into a well-oiled growth machine. It's the power behind seamless customer experiences in Shopify stores. The foundation for unparalleled efficiency. And the key to scaling your e-commerce empire.
But we get it - taming inventory feels like trying to herd cats. Shopify offers some built-in tools to get started. But as your store grows, their cookie-cutter options fall short.
Don't lose hope. With the right strategies, your Shopify inventory can go from a source of struggle to a secret superpower. In this guide, we'll show you how to:
- Avoid critical stockouts that leave customers fuming
- Optimize excess inventory that's wasting time and money
- Make data-driven choices to directly boost profits
- Regain control with inventory reports tailored to your needs
Let's get started bringing logic (and a little magic) to your Shopify store's inventory management
Managing Your Shopify Inventory: More Than Just Organizing Products
Effective inventory management goes far beyond perfectly arranged shelves and tidy storerooms. When leveraged strategically, it becomes a catalyst empowering exponential growth for your Shopify business.
Getting inventory right unlocks tangible benefits like:
- Freed Up Capital: Reducing excess stock has released trapped capital to reinvest in high-potential areas.
- Ensured Availability: Maintaining adequate levels has prevented stockouts leading to missed revenue.
- Lowered Expenses: Optimizing capacity has minimized bloated costs around storage, utilities, and labor.
- Streamlined Workflows: Increased visibility and insights have enabled smoother, error-reduced processes.
- Data-Driven Informed Decisions: Accurate data has guided smarter choices on purchasing, pricing, and promotions.
- Reduced Waste: Keeping products moving has avoided losses from expiration or obsolescence.
- Optimized Logistics: Efficient inventory transitions have improved flows between warehouse locations and across supply chains.
That’s just the start. When inventory management is fully mastered, it fuels better forecasting accuracy, and strategic marketing optimization, and unlocks hidden opportunities - a flywheel generating continuous improvements across your e-commerce business.
Knowing your Options: Native Reports available on Shopify to manage Inventory
Shopify offers several built-in inventory reports, providing baseline insights into your operations. Let's explore these native options and their uses.
1. Month-end inventory snapshot:
This shows the quantity of each product variant you had in stock at the end of each month. Data in the report includes SKU name, SKU code, and Available quantity.
2. Month-end Inventory value:
This shows the current amount of Available inventory on products with a cost-per-item value assigned at the time of sale. This is an extension of the month-end inventory snapshot report showing the value of the inventory.
3. Average Inventory Sold per day:
This report shows the average number of items of inventory sold per day by product SKU. Data in the report includes SKU name, SKU code and Average units sold in the timeframe selected.
4. Percent of Inventory Sold:
This report shows the percentage of each variant's inventory sold that is sold from the total starting quantity during the selected period. Data in the report includes SKU name, SKU code, Starting quantity and Percentage of units sold.
5. ABC analysis by product:
The report gives each product variant a grade based on the percentage of your revenue that each variant contributed to over the last 28 day.
- A-grade - Your top-selling products that collectively account for 80% of your revenue.
- B-grade - The products that collectively account for the next 15% of your revenue.
- C-grade - The products that collectively account for the last 5% of your revenue.
6. Product sell-through rate:
The report shows what percentage of your total inventory you’ve sold during the selected period.
7. Days of inventory remaining:
The purpose of this report is to give an overall sense of how long your tracked inventory is estimated to last, based on your average sales rates for each variant, and the amount of inventory you have left.
These reports provide a surface-level view, but there are gaps. Can you afford to make decisions based on limited or outdated data? Let’s look at these limitations in the next section.
Traps to Avoid: Why Shopify's Tools Come Up Short
Don't get us wrong—Shopify equips you with some table stakes tools for basic inventory management. Tracking quantities, viewing reporting, bulk editing items. Useful, yes. Going to transform your e-commerce empire overnight? We think not.
The reality is harsher than their polished messaging suggests. Relying solely on their out-of-box capabilities leaves dangerous blindspots. Limited visibility. Inflexibility. Reactionary approaches. All causing growing pains behind the scenes.
Let's peek behind the curtain at some under-discussed shortfalls:
- Manual Monitoring is a Time Drain: Updating every SKU by hand? No thank you—ain't nobody got time for that. And good luck not slipping up.
- Predicting the Future is a Losing Game: Analyzing older than 90-day data to forecast trends? Crystal balls remain heavily back ordered last we checked.
- Disjointed Multichannel Insights: So you sell on 10 platforms, but can only see Shopify inventory? 🤦
- Immediately Outdated Reports: "Hey Siri, show me the real-time snapshot of...oh wait, this report is 72 hours old already?"
- Inflexible Customization: No bending the pre-built reports or workflows to your specific operational needs. One-size-fits-all all leaves most looking pretty Shopify store owners frustrated.
Look—we're not about bashing anyone. Shopify nails many things exceptionally well. But the cold hard truth is that as businesses scale, the native capabilities hit a ceiling faster than Tom Cruise. You'll quickly outgrow the basics and hunger for tailored solutions
Level Up Your Reporting: 10 Must-Have Inventory Management Templates for Shopify Businesses
To make truly informed inventory decisions, you need access to more robust and timely reporting. Here's a collection of must-have advanced report templates that tackle these challenges head-on
1. Sales Velocity Report:
Reveals the pace at which products sell, highlighting trends in popularity and inventory turnover. This is vital for understanding market demand and optimizing stock levels.
- Helps You Monitor: Product IDs, sales quantities, time periods, and sales channels.
- Sample Report: Sightfull Sales Velocity: https://www.sightfull.com/templates/sales-velocity
2. Weeks of Supply Report:
Gauges the longevity of your current inventory based on historical sales trends. Key for avoiding overstocking or stockouts.
- Helps You Monitor: Inventory levels, sales rates, and time frames.
- Sample Report: Cogsy Weeks of Supply: https://www.cogsy.com/guides/weeks-of-supply-formula
3. Excess Inventory Report:
This helps you pinpoint and manage overstocked items to minimize holding costs and maximize warehouse efficiency. Make informed decisions on stock reduction strategies.
- Helps You Monitor: Product IDs, quantities in stock, and historical sales data.
- Sample Report: Smartsheet Excess Inventory: https://www.smartsheet.com/inventory-report-templates
4. Inventory Accuracy Report:
Ensures that your inventory records align with physical stock, crucial for order fulfillment and inventory management. Aids in pinpointing discrepancies for resolution.
- Helps You Monitor: SKU numbers, counted quantities, system records.
- Sample Report: Smartsheet Inventory Accuracy: https://www.smartsheet.com/inventory-report-templates
5. Inventory Turnover and Aging Reports:
Gain insights into the frequency of inventory sales, replenishment rates, and the age of stock items. Helps prevent overstocking and product obsolescence.
- Helps You Monitor: Product categories, turnover rates, and aging periods.
- Sample Report: Polestar Inventory Turnover & Aging: https://www.polestar.com/inventory-aging-report
6. ABC Classification Report:
Prioritizes your inventory management efforts. Categorizes items into A, B, and C based on their importance, such as sales volume or revenue contribution.
- Helps You Monitor: Product categories (A, B, C), sales volume, and revenue contribution.
- Sample Report: AbcSupplyChain ABC Classification: https://www.abcsupplychain.com/abc-analysis-examples
7. Demand Forecasting Report:
Anticipate future sales with confidence, leveraging historical sales data and market trends. Helps you to prepare your inventory accordingly for accurate demand forecasting.
- Helps You Monitor: Historical sales data, market trends, and forecasted demand.
- Sample Report: Smartsheet Demand Forecasting: https://www.smartsheet.com/sales-forecast-templates
8. Purchase Order Report:
Keep track of all purchase orders and supplier relationships effectively. Ensures timely inventory replenishment.
- Helps You Monitor: Order numbers, supplier details, product quantities, and delivery dates.
- Sample Report: Smartsheet Purchase Order: https://www.smartsheet.com/purchase-order-templates
9. Multi-Location Inventory Report:
For businesses with multiple locations, get a consolidated view of inventory levels across locations. Facilitates optimal stock allocation and distribution.
- Helps You Monitor: Location details, inventory levels, and product movement.
- Sample Report: Process Street Multi-Location Inventory Tracking: https://www.process.st/checklist/multi-location-inventory-tracking-template
10. Count Variance Report:
Highlights discrepancies between physical inventory counts and system records. Crucial for maintaining inventory accuracy and identifying potential issues.
- Helps You Monitor: Product SKUs, expected counts, actual counts, and variances.
- Sample Report: Smartsheet Count Variance: https://www.smartsheet.com/inventory-report-templates
What if we told you that you could reclaim hours wasted on manual report creation and updates? Discover a way to automate your inventory insights. Say hello to Locale.ai
Reporting doesn’t have to be this hard. Try the Locale way.
As a Shopify merchant, you have two options for advanced inventory reporting and workflows:
- The Old Way: Manually create reports, hunt down online templates, and piece together alerts and workflows across multiple tools.
- Try Locale’s One Click Templates: Access 50+ pre-built, Shopify-specific reports. Get real-time inventory analytics with one-click integration. Automate alerts directly to Slack, email, or via webhooks for custom actions.
With Locale, you don’t have to settle for one-size-fits-all inventory management. As your strategic direction shifts, our flexible platform shifts with you.
With Locale, you can:
● Consolidate real-time visibility across all sales channels into a unified command center. No more blind spots.
● Flex reporting templates to your workflows, locations, and product lines rather than forcing you into a one-size-fits-all setup.
● Set intelligent alerts and triggers to automate analysis based on trends and KPI thresholds you define. Proactively stay ahead of threats.
● Develop enterprise-grade forecasting leveraging historical data to efficiently plan stock levels, transfers, and inventory investments.
Conclusion
Locale takes away the pain of fragmentation and everyday manual busywork involved in running a Shopify business. Experience the power of effortless reporting and automation with:
- One-click advanced reporting for immediate insights — No Coding Skills Needed
- Real-time data to react quickly to inventory changes.
- Automated alerts to Slack, email, or custom webhooks, keeping you informed on the go.
- Streamlined workflows for proactive inventory management.
Take control of your Shopify inventory today. Sign up now with a free account and discover how Locale revolutionizes your operations.
Sign-up Now
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