Shopify is one of the most popular ecommerce website builders out there for a reason. It’s easy to use, and it even offers some basic inventory management features. But any well-run Shopify store needs more — especially when it comes to inventory management. Without the right system, problems like stockouts and overselling can throw a wrench in your operations. A solid inventory management tool prevents these issues so you can keep customers satisfied and your business thriving.
Here’s a guide to why inventory management matters for Shopify, plus how efficient inventory management tools, like Fishbowl, help you track stock levels, prevent overselling, and streamline operations.
Shopify inventory management: An overview
Shopify gives businesses everything they need to sell online — and offers the basic hardware needed to sell in person. But running a Shopify store involves more than just making sales. You need to track what inventory is coming in, what’s going out, and what’s running low. That’s where inventory management becomes important.
Shopify’s inventory tracking tools are built in, which makes simple tasks easier. You can monitor stock levels across multiple locations and set up automatic low-stock alerts. But if you’re scaling up, these basic tools might not cut it.
That’s why many businesses turn to inventory management software that integrates with Shopify. With advanced tools, you can automate many inventory processes and maintain more accurate records. As a result, you’ll spend less time fixing stock issues and more time growing your business.
Benefits of inventory management for Shopify
Robust inventory management software gives Shopify stores a sharper edge on the competition. Here’s how.
Prevent overselling and stockouts
Running out of stock or accidentally selling items you don’t have on hand frustrates customers. A solid inventory system updates stock levels in real time so you always know what’s available. With accurate numbers, you can meet demand consistently and keep customers happy.
The right inventory management software also has the ability to forecast demand based on a variety of criteria, including past performance and seasonal changes. By planning ahead, you can make sure you have the right quantity on hand for just about any circumstance.
Automate reordering
Manually tracking inventory isn’t just time-consuming. It’s also risky. Without an automated system, you risk overordering or underordering, which can hurt your bottom line.
Inventory management tools like Fishbowl take the guesswork out of restocking, providing automated reorder points that trigger restocks when inventory levels get too low. This prepares you to always meet demand instead of scrambling for stock at the last minute.
Sync across sales channels
If you sell across multiple platforms, managing inventory gets complicated, especially when each channel has its own inventory system. It’s easy for stock levels to get out of sync, leading to confusion and mistakes.
An effective inventory management system syncs stock levels between Shopify, physical stores, and other online channels to ensure consistency. This prevents errors like double-selling and keeps inventory levels up to date.
Improve cost efficiency
Overstocking means tying up cash in unsold goods, while understocking leads to missed sales. With efficient inventory management, you order just the right amount of product, steadying cash flow. This also optimizes inventory turnover rates, which reduces holding costs and frees up resources to invest elsewhere in your business.
Streamline accounting
Solid inventory management software keeps financial records organized and accurate by providing real-time updates on stock levels and sales. When inventory data is in sync with accounting, it becomes easier to track expenses, revenue, and profit margins. This reduces the chance of mistakes, making your bookkeeping smoother and more reliable.
Plus, some inventory software, like Fishbowl, integrates seamlessly with accounting solutions like QuickBooks. This makes handling your business’s finances even easier. You don’t need to spend extra time reconciling stock levels with your financial reports, and you have more confidence in every number.
Challenges of inventory management for Shopify
While inventory management is crucial for smooth operations, it comes with its own set of challenges for Shopify business owners. Here are four key difficulties that can impact efficiency.
The need for additional tools
While Shopify has built-in inventory management features, store owners often need more advanced software to handle complex tasks, like automated reordering, bulk updates, and detailed reporting. But integrating multiple inventory systems is a hassle. Each comes with its own learning curve and eats up part of your resources.
This is why many Shopify store owners turn to budget-friendly inventory solutions like Fishbowl, which pairs seamlessly with Shopify for a more streamlined, efficient process.
Difficulty forecasting demand
Accurately predicting product demand is one of the trickiest aspects of inventory management, especially for Shopify businesses with varying sales volumes or seasonal products. Without the right data and tools, you might overestimate or underestimate stock needs, leading to wasted resources or missed opportunities.
Inventory management tools that can accurately forecast demand help you overcome this challenge by using predictive analytics to paint a clear picture of what to expect.
Complex returns management
Product returns can wreak havoc on inventory accuracy. If items are returned and not restocked, or if you fail to update inventory quantities promptly after returns are made, you risk inventory discrepancies in your recordkeeping. This makes it harder to maintain stock levels, make sales, and fulfill orders.
Inventory management software like Fishbowl helps navigate this reverse logistics problem more efficiently and properly account for all returned items.
Dropshipping inventory management
Many Shopify stores rely on dropshipping, a business model where you don’t physically store or ship the products you sell and instead rely on third-party suppliers to handle those logistics. This makes it tricky for your business to keep track of inventory levels. Without accurate and real-time updates, you might accidentally promise customers products that aren’t available.
Inventory management solutions like Fishbowl alleviate these challenges by helping you stay on top of dropshipping orders.
8 key features of inventory management for Shopify
Here are eight key features of good ecommerce inventory management software to help you stay organized, avoid errors, and scale your business with ease.
1. Ease of integration
The best way to manage inventory on Shopify is with software that integrates easily. The tools you use should connect effortlessly with your Shopify store to sync product details, stock levels, and pricing automatically. This eliminates the need for manual data entry, saving time and reducing errors.
The easier the integration, the faster you can get your inventory system up and running — and the less you need to worry about maintaining two (or more) separate systems.
2. Barcode scanning
Using barcodes for inventory management is a game-changer. With barcode scanning technology, you can quickly update stock levels as you move products in and out, removing the need to manually enter data. This speeds up processes like receiving shipments, fulfilling orders, and even conducting inventory audits. It also minimizes human error.
3. Multi-location functionality
For businesses with multiple warehouses or retail locations, it can be tough to track how much inventory is spread across them all. Multi-location functionality is the answer to this challenge. It allows you to stay on top of stock levels, no matter where products are. This feature allows for better decision-making: You can transfer stock between locations when necessary and make sure high-demand products are always available where customers need them. In turn, you optimize storage and improve customer satisfaction.
4. Multichannel syncing
If you sell products across multiple channels, multichannel syncing keeps everything running smoothly. Multichannel syncing updates stock levels automatically across every platform where you sell after a sale is made on one of them, eliminating stock discrepancies and minimizing the risk of overselling. Plus, it provides a unified view of overall inventory, making it easier to manage and track products.
5. Bulk updates
Updating product listings is simple and quick when you can make one change in your inventory management software to automatically modify the appropriate listing in every channel it’s connected to. Whether you’re adjusting prices, quantities, or product descriptions, bulk updates allow you to simultaneously apply changes across multiple platforms. This is useful when you need to make fast adjustments during sales events or seasonal transitions because it reduces the time you spend on manual updates.
6. Advanced analytics
Advanced analytics provide deeper insights into inventory and sales trends than you can get by manual means. With customizable reports, you can track key metrics like product sales performance, inventory turnover, and order history. These insights let you make data-driven decisions to optimize stock levels and order management. In turn, it’s easier to identify opportunities for growth, which can help improve your overall business strategy.
7. Forecasting ability
The best inventory management software uses historical sales data, trends, and factors like seasonality to predict future demand. With this feature at your disposal, you can plan ahead and make smarter purchasing decisions that align with customer needs.
8. Accounting integrations
Accounting integrations make managing finances easier by automatically syncing inventory data with accounting software like QuickBooks. This integration makes sure your financial records — like cost of goods sold (COGS), inventory value, and profits — are always accurate. And with automatic updates, you don’t need to input each inventory adjustment into your accounting system manually, saving time and reducing errors.
Optimize your Shopify store’s inventory management with Fishbowl
Selling on Shopify? Use Fishbowl to take control of your inventory and streamline operations for smarter growth. Fishbowl’s powerful inventory management software integrates seamlessly with Shopify to track stock levels, automate order processes, and eliminate overselling. Plus, Fishbowl’s QuickBooks integration keeps your financials accurate and up to date.
Schedule a demo today to learn how Fishbowl can streamline your inventory management.
