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Shopify Inventory Management: Best Practices for E-commerce Success


When it comes to selling products online, Shopify is by far one of the best choices. In simple terms, Shopify is an eCommerce platform that works especially well for small and local businesses. But it does come with a certain caveat – inventory management.
In this post, we will be exploring some of the best practices concerning Shopify inventory management, such that you too can streamline your inventory processes and maximize profits.

Why Is Inventory Management Important for eCommerce Success?

Inventory management is crucial when it comes to eCommerce business as it can quite literally amp up your profits. It is a well known fact that if you don’t manage your inventory well, you risk running into problems like stock exhaustion, excessive stock, or botching up your orders. These problems can, in no less terms, cost you money and precious customers. The answer? Optimizing your inventory process.
As such it’s paramount that you have the right products available, side-step errors, and keep your customers happy when using Shopify for small businesses.
In fact, businesses can achieve up to a 10% reduction in inventory costs by addressing simple issues such as overstocking and understocking.

Best Practices for Shopify Inventory Management

Listed below are some best practices for managing Shopify for small businesses. Let’s dive straight in:

Use a centralized inventory management system

Using a centralized hub can help you keep track of your inventory across all your sales channels. Through this, you can avoid running out of stock as a result of overselling.

Set up automated inventory alerts

Automated alerts can help you stay updated with your inventory levels and avoid running out of stock. Via this, you can also set up alerts for low stock, out of stock, and more.

Optimize your inventory turnover ratio

Inventory turnover ratio refers to the number of times you exhaust and replace your inventory during a certain time period. As such, optimizing your inventory turnover ratio allows you to cut down on your inventory costs and increase your profits.

Implement a first-in, first-out (FIFO) system

Implementing the FIFO system means that you sell your oldest inventory items first. This can help you avoid wasting products and losing money, especially if you’re dealing with perishable items .
Use product bundling to increase sales. Product bundling involves selling multiple products as a single order package. This can help you boost your sales and clear out your slow-moving inventory.

Leverage data analytics to make informed decisions

Data analytics can help you understand your inventory better. As such, you can use data analytics to spot trends, predict demand, and more.

Keep your inventory organized

Organized inventory is a boon in terms of saving money and time. To that end, you can use labels, bins, and other tools to keep your inventory in order.

Use a barcode scanner for faster inventory management

Having a barcode scanner can help you speed up your inventory processes and reduce errors. They can be used to update your inventory as well.
Implement a cycle counting system –

This means that you count a small part of your inventory regularly. This can help you find and fix inventory issues before they get worse.

Use a third-party logistics provider (3PL) 

A third-party logistics provider, or 3PL, can help you handle your inventory and shipping better, saving you time as well as reducing errors. You can also outsource your inventory and shipping to a 3PL and focus on your core business.


Inventory management is incredibly essential for any and all eCommerce businesses. As such, by following these tips for Shopify inventory management, you too can improve your inventory process, reduce errors, and increase your profits. If you need help with your inventory management, you can partner with Shipyaari. Our team of experts can help you optimize your inventory process and achieve eCommerce success goals.

Contact Shipyaari today to find out more about our inventory management services.

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