If you run a Shopify store and have any kind of stock, you’ve likely already experienced the challenge of good Shopify inventory management.
You might need to deal with outdated inventory data, or suffer insufficient supplies after improper demand forecasting. Shopify inventory management gets even more complicated when you need to track stock at multiple locations.
Yet, how organized your stock is can directly impact your customer satisfaction and profitability. Luckily, Shopify makes inventory management easy when you know how to make the most of the platform's user-friendly solutions (like Shopify POS integration).
In this complete guide on mastering Shopify inventory management in 2025, we’ll go through how to use Shopify to get full control of your inventory. You’ll learn how to set up and track stock and find out which Shopify inventory management apps are real lifesavers.
Why is Inventory Management Important?
Inventory management involves tracking and optimising the flow of stock for a business. Efficient management is important for various reasons, whether you sell on Shopify or other platforms:
- It prevents spoilage and dead stock: Optimising inventory and order fulfilments allows you to avoid spoilage for products with an expiration date. You also avoid products becoming dead stock because they’re out of style or season.
- It reduces storage costs: Optimising stock levels in multiple locations can help you avoid storing too many products at one, thus decreasing your storage costs.
- It improves order fulfilment: Using inventory distribution and prioritised fulfilment, you can improve delivery time and customer satisfaction.
- It improves your cash flow: Your stock determines how much you can sell and what you need to buy. Understanding the stock levels will help you manage your cash flow more effectively.
Now, let's take a look at specially how Shopify inventory management can help you achieve these benefits.
Which Shopify Inventory Management Solution is Right for your Business?
No matter what kind of eCommerce you’re running, it’s safe to say Shopify has something for you. The popular platform caters to the needs of businesses of all sizes—from small start-ups to large enterprises. Shopify inventory management solutions can be used whether a business has 1 inventory location or 200 (see more here):
- Shopify Starter: 2 locations
- Shopify Basic: 10 locations
- Shopify: 10 locations
- Advanced Shopify: 10 locations
- Shopify Plus: Up to 200 inventory locations
Apart from practical Shopify apps, Shopify has built-in tools and features to help you optimise stock. With centralised order management, fulfilment is simplified. Orders, shipping, and updated inventory are streamlined. You can view live key metrics, analytics, and reporting for commerce insights that can help you grow your business. You can also forecast demand, track sales, set low-stock alerts, and more with integrations.
With Shopify POS, your inventory management syncs in-store data with online data. This gives you a clear overview of which products you have in which locations, making it possible to optimise stock levels.
In sum, your eCommerce systems and point-of-sale can all be under one umbrella, further simplifying multi-channel Shopify inventory management.
How Do I Set Up Inventory on Shopify?
Let’s get into how to set up inventory on Shopify.
1. Create/select product
From admin, you’ll want to head to “Products”. You can create a product listing there, filling in a title, description, pricing and other data. If you want to set up inventory for a product already listed, simply click on the product. If your product has variants, click the specific variant you wish to track.
2. Track quantity
As you fill in information about the product or product variant, you’ll find an "Inventory" section. Here, you’ll have the option“Track quantity”. You can also set the quantity for various locations you have registered in your Shopify inventory management.
3. Configure stock policies
Next, you’ll want to decide whether to continue sales after stock runs out. When one of your products' inventory levels is zero, it is considered out of stock. Businesses can let customers buy out-of-stock products if they have stock coming soon or have products available for preorder.
This doesn’t apply to Shopify POS, but POS can warn staff that they are trying to sell an unavailable item.
4. Add SKU or barcode data
If your products have SKU (Stock Keeping Unit) numbers or barcode data (for example, ISBN, UPC, etc.), you can also add these in the inventory section.
Now, all you have to do is repeat these steps with the remainder of your products. Your stock is now integrated with Shopify inventory management.
Pro Tip: Organise Inventory With Collections
A pro tip for Shopify inventory management is to organise product collections well for seamless inventory setup. When you create a product listing, you’ll also want to organise it into a collection.
Product inventory will be easier for you when products are organised into collections. For example, it’ll be easier to use Shopify’s bulk editing features to update all the products in a specific collection.
Decide whether you want to create manual collections or use automated collections, for example, based on tags or other conditions. You can also choose to create simple or nested collections if you have more products.
Start by identifying broad categories for your products, and then determining subcategories within them. This allows you to plan out a logical and cohesive structure for your collections.
How Do You Track Inventory in Shopify?
Next, you want to understand how to track and adjust your stock in Shopify inventory management. You can view your product inventory on the Products or Inventory pages.
There, you can keep track of inventory quantities and inventory states. Your products can be in the following states:
- On hand: You have the product at the location.
- Available: The product is in the inventory that you can sell.
- Committed: The product is part of a placed order that is not yet fulfilled.
- Incoming: The product is on its way to the location.
- Unavailable: The product is reserved, for example, as safety stock or because it’s damaged.
Grasping these states allows you full control over your inventory and how much of your stock is available to sell.
Low Stock Alerts
The built-in features of Shopify inventory management allow you to monitor inventory levels in real-time. However, you’ll have to install a Shopify app if you want actual stock alerts.
The Shopify Help Centre recommends Stocky by Shopify, but there are various apps and solutions to choose from. We list some of the best Shopify inventory management apps further down in this guide.
With one of these Shopify apps, you can set up low-stock, out-of-stock, back-in-order, and preorder alerts.
Shopify Inventory Management in Multiple Locations
If you’re going to stand out in the competitive landscape of eCommerce, selling on multiple channels is nowadays a must. Keeping track of several locations could bring challenges with it. If you’re selling online and offline, you might have physical stores, warehouses, and dropshipping companies to keep track of.
Fortunately, Shopify inventory management takes care of all that. The platform launched “Locations” back in 2018. Since then, Shopify supports multi-location management, giving you a plain view of your stock levels across all locations. Its user-friendly interface and comprehensive features provide a centralised platform where businesses can streamline multi-channel management.
Shopify POS synchronises inventory across multiple locations in real-time. That way, you’re always aware of which products you have in each location. It also allows you to optimise stock levels, perhaps even reducing storage costs.
The platform’s prioritised order fulfilment is another useful feature. It can minimise shopping costs and boost order turnaround time. The feature factors in shipping costs, inventory levels, and proximity to customers, and thereby prioritises which location should fulfil orders first. This means orders are fulfilled faster, leading to a better customer experience.
How to Assign Inventory to Locations
Before you can assign inventory to a specific location, such as a warehouse or a physical store, you’ll need to create that location in Shopify. Follow these steps to add locations and assign inventory to locations:
- Add a location: From the Shopify dashboard, click Settings > Locations > Add location. Fill in name and address. Choose “Fulfil online orders from this location” and click “Save”.
- Set up priorities: A newly added location will automatically be at the bottom of your order fulfilment priority list. Click “View or edit location priority” to rearrange the order.
- Adjust which locations store a product: Click on the product you want to adjust locations for. Under “Inventory will be stocked at”, select “Multiple locations”. Under “Inventory”, click “Edit locations”. You can now select and deselect locations that store this product, and click “Save”.
You can also use the bulk editor by going to Products > Inventory and selecting the location.
Best Shopify Inventory Management Apps in 2025
Shopify’s built-in feature provides a great solution for businesses with a basic and small inventory. However, businesses with larger amounts of stock and looking to scale should unleash the power of Shopify inventory management apps.
Without a Shopify app’s further features, more manual steps can lead to human error. For example, manual inventory updates are required. The platform’s forecasting capabilities and analytics are also limited compared to what a Shopify app can offer.
Let’s look at the best Shopify inventory management system (IMS) providers of the year.
Stocky: For Shopify POS merchants
Stocky by Shopify is the platform’s first-party inventory app. It is ideal for businesses using Shopify POS, as it allows you to manage in-store and back-office inventory workflows efficiently. Some main benefits of Stocky:
- Create and manage purchase orders from one centralised location
- Receive demand forecasting based on your sales rates
- Benefit from comprehensive analytics and reports
- Gain expanded capabilities for transferring stock in a streamlined way
Stocky provides a solution for businesses that want further Shopify inventory management capabilities.
Shopventory: For Multi-channel Syncing
Thrive by Shopventory is a cloud-based IMS that shines when it comes to letting you manage and sync multiple locations and channels. Shopify praised it as the best choice for retail, apparel, and food brands that sell in-store and online. It’s also ideal for syncing inventory across channels like Amazon or eBay. Some main benefits of Shopventory:
- Ideal for multi-channel and multi-location syncing
- Reporting tools by location and channel based on accurate inventory data
- Automation features, such as automated purchase orders and inventory balancing
- Integration with Shopify POS, Clover, Google Shopping, and Square
The app’s reporting tools help you make good business decisions regarding your supply chain. You can get insight into the profitability of a certain product range or how your campaigns have done from one year to the next.
Katana: For Small Manufacturers
Katana is an app tailored to help you manage the manufacturing process and fulfilment. It isn’t just an IMS but a comprehensive enterprise resource planning software. It’s an ideal choice for crafters or smaller manufacturers selling their own finished products. Some main benefits of Katana:
- Extensive resource planning app, managing raw materials to final product
- Dashboards for creating visual production plans
- Floor control app, managing floor-level functions
- Sync orders, stock, and fulfilment status between Shopify and Katana
The app allows you to maximise efficiency throughout the whole production chain, from managing raw materials to reaching the customer with the finished product.
How to Choose Best the Shopify Inventory Management App for You
Apart from the three options mentioned above, there are hoards of Shopify inventory management apps. How can you choose one that will suit the needs of your business? Here are some factors to keep in mind.
Set a budget
Realistically, you need to choose an IMS your business can afford, as the cost of apps varies greatly. Remember to factor in costs for installation, set up, employee training, and hardware.
Identify your needs
The IMS you choose should be tailored to the size and requirements of your business. For example, if you have many employees needing access to the system, you’ll want to consider whether you have to pay per user or add an unlimited number of users. Once you’ve determined your needs, you can match them with app features such as demand forecasting or in-store POS integration.
Ensure seamless integration
Naturally, integration with your eCommerce platform is a given. Ensure the app you choose integrates well with Shopify and your current tech stack. You should also double-check that it synchronises with your POS if you have a physical store.
Prioritise user-friendly apps
An app might have all the right features, but if its usability has room for improvement, that’s something to consider. A good IMS is there to simplify your team’s life, not complicate it. Remember that you’ll have to invest time and money to train yourself and staff to use the app.
Why Shopify Inventory Management is So Easy
Managing inventory comes with its headaches, but it all comes down to what tools you’re using to face the challenges. Inventory management software helps eCommerce businesses eliminate as much human error as possible.
With Shopify, you already have this software built into the platform. This means you can track and manage stock at the same centralised platform where you deal with other eCommerce tasks. A summary of Shopify inventory management benefits:
- Centralised management
- Automation features
- Real-time tracking of inventory
- Multi-channel and multi-location support
- Seamless integration with apps and tools
- Reporting and analytics
A main benefit of Shopify inventory management is the automation features. For example, inventory updates are automatically made at sales. With Shopify POS, you can have real-time syncing between online and offline channels. You can sell from various channels and locations, yet still have your stock management in one place.
Most importantly, Shopify makes integrations with apps and third-party tools available. Besides its built-in features, the sky’s the limit for the inventory solutions you can integrate into your online store. This allows for endless scalability and future-proofs your store, as your use of Shopify inventory management can keep evolving.
Get Support with Shopify Inventory Management
Effective stock management is an important factor in maintaining profitability and customer satisfaction. Good Shopify inventory management can help you prevent spoilage and dead stock, reduce storage costs, optimise order fulfilment, and improve your cash flow.
As a trusted Shopify partner, Medito Digital can help simplify inventory setup, management, and optimisation for your eCommerce. If you’re already established on Shopify, this expert Shopify agency can assist you in improving the inventory management for your online and offline stores. If your business has been considering switching to Shopify for better inventory control, Medito is the surefire way to get started with Shopify the right way.
Don’t let stock issues hold back your business growth. Partner with Medito and take control of your Shopify inventory management today!
