How to Manage Inventory on Shopify: A Complete Guide

Learning how to manage inventory on Shopify starts in your admin under Products → Inventory, where you can enable tracking, view stock levels, make manual adjustments, and set up purchase orders. But doing it well — preventing stockouts, avoiding overstock, and knowing when to reorder — requires more than clicking around the dashboard. This guide covers the full picture.

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Step 1: Enable Inventory Tracking in Shopify

Before anything else, Shopify needs to know it should track a product's stock. It doesn't do this automatically for every SKU.

To enable tracking:

1. Go to Products in your Shopify admin
2. Open a product and scroll to the Inventory section
3. Check Track quantity
4. If the product has variants (size, color, etc.), you'll set quantities per variant

One thing that catches merchants off guard: if you sell bundles or kits, Shopify tracks each component SKU independently. It won't auto-decrement component stock when a bundle sells. You'll need an app or manual workflow for that.

Also worth enabling: Continue selling when out of stock — but only if you can actually fulfill backorders. Leaving this unchecked means Shopify will stop the product from being purchased once inventory hits zero, which is usually the safer default.

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Step 2: Understand Shopify's Inventory States

Shopify tracks inventory across three states you'll see on the Inventory page:

• Available: Units that can be sold right now
• Committed: Units tied to open orders that haven't shipped yet
• Unavailable: Units reserved for transfers, held for other reasons, or in draft orders

If you're looking at your available count and it seems lower than expected, check your committed number first. A spike in committed inventory usually means orders are backing up in fulfillment.

For a store doing 200–300 orders/month, a committed count that's 20–30% of your available stock is fairly normal. If it's climbing above 50%, your fulfillment lag is becoming a problem worth solving separately.

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Step 3: Set Up Your Inventory Page as a Working Tool

The Inventory page (Products → Inventory) is where most daily management happens. By default it shows all products, but it becomes far more useful once you filter and sort it intentionally.

A few things worth doing:

• Filter by location if you have multiple warehouses or fulfill from more than one place
• Sort by quantity (low to high) so your most critical SKUs surface immediately
• Use the CSV export to pull a snapshot for forecasting in a spreadsheet

The CSV export is underrated for small-to-mid-size stores. If you're managing under 200 SKUs and don't want to commit to an app yet, a weekly export to Google Sheets where you calculate sell rate and days of stock can get you surprisingly far.

Speaking of which — let's talk about that calculation.

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Step 4: Calculate Reorder Points (Don't Guess)

The most common inventory mistake on Shopify isn't running out of stock. It's running out of stock and being surprised by it. Reorder points exist to remove the surprise.

The basic formula:

Reorder Point = (Average Daily Sales × Lead Time in Days) + Safety Stock

For example: if you sell 15 units/day of a SKU, your supplier takes 10 days to deliver, and you want a 5-day buffer:

Reorder Point = (15 × 10) + (15 × 5) = 150 + 75 = 225 units

When your inventory hits 225 units, you place the order. By the time stock arrives, you'll have roughly 75 units remaining — your safety cushion.

The hard part is keeping these numbers current. Average daily sales change with seasons, promotions, and trends. Most merchants set a reorder point once and forget it, which is how you end up either over-ordering in slow months or stocking out during a campaign.

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Step 5: Use Purchase Orders and Transfers

Shopify has built-in Purchase Orders (under Products → Purchase Orders in newer Shopify plans) and Transfers for moving stock between locations.

Purchase orders in Shopify let you:

• Create a PO against a supplier
• Receive partial shipments and track what's still incoming
• See "incoming" inventory reflected in your stock levels before it arrives

If your supplier ships in partial fulfillments — common with overseas manufacturers — this matters. "Incoming" inventory shows you what's on the way so you don't accidentally double-order.

Transfers work similarly but between your own locations. If you have a main warehouse and a retail location, transfers let you move stock intentionally while keeping records clean.

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Step 6: Manage Inventory Beyond Shopify's Native Tools

Shopify's built-in inventory management is solid for the basics. Where it falls short:

No automated low stock alerts. You won't get an email or Slack message when a SKU drops below your threshold. You have to check manually.

No demand forecasting. Shopify doesn't analyze your sales velocity and tell you how many days of stock you have left, or flag that a SKU will hit zero in 8 days based on current sell rate.

No reorder suggestions. The system won't tell you when to buy more, how much to order, or factor in lead times.

For stores under 50 SKUs with very predictable demand, you can manage this manually. Weekly exports, a spreadsheet, and some discipline will work. But once you're past 50–100 SKUs or dealing with any kind of seasonality, you're going to miss things.

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Step 7: Choose the Right Inventory App for Your Stage

The Shopify App Store has a range of inventory tools that fill the gaps above. Here's an honest breakdown for different store sizes and needs:

If you want low stock alerts without complexity: Apps like iAlert ($2.99/mo) or LSA Low Stock Alert ($5.99/mo) send notifications when stock drops below a threshold. They're simple and cheap. The tradeoff is limited forecasting — you'll know you're low, but not why or when to reorder.

If you want alerts plus basic forecasting: Bee Low Stock Alert & Forecast ($5.99/mo) combines notifications with sales-velocity-based reorder quantity suggestions. Good value for the price. One limitation: data export between stores isn't supported, which matters if you operate multiple Shopify stores.

Alertr is worth considering here too — it's built specifically for DTC brands in the 100–2,000 SKU range. The free tier covers 50 SKUs, and Pro is $29/mo (currently in beta at $19/mo, locked in forever). Beyond just alerts, it tracks sell rate, estimates days of stock remaining, and sends configurable notifications via email or Slack. It's a good fit if you want your reorder workflow to live in your inbox or a Slack channel rather than logging into another dashboard.

If you need full inventory planning with purchase orders: Prediko ($49/mo+) handles AI-based forecasting and PO management end-to-end. It's comprehensive, though there's a learning curve — expect to spend real time during setup. Fabrikatör (from $79/mo) is similar, with strong real-time data and PO automation.

If your needs are more operational (manufacturing, multi-location, ERP): Katana ($299/mo) is aimed at brands with manufacturing workflows, not typical DTC. It's a different category entirely.

The honest take: most DTC Shopify brands between 100 and 2,000 SKUs need a reliable alert system more than they need a full planning platform. The planning tools are powerful, but the complexity cost is real. Start with alerts and accurate sell-rate data, then graduate to full planning if you outgrow it.

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Step 8: Build a Weekly Inventory Review Habit

The best tool in the world won't help if nobody's acting on the data. Build a lightweight weekly review into your operations:

1. Monday morning: Check any low-stock alerts from the past week. Confirm reorder decisions.
2. Review sell rate changes: Did any SKUs spike or drop significantly? Adjust reorder points if needed.
3. Check incoming stock: Any POs due this week? Flag if a shipment is delayed.
4. Flag slow movers: SKUs that haven't moved in 30+ days are cash tied up. Consider a promotion or markdown.

This review shouldn't take more than 30 minutes for most stores. If it takes longer, your tooling isn't surfacing the right information — that's worth fixing.

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Summary: The Inventory Management Stack That Works

Layer	Tool	Cost
Core tracking	Shopify native	Included
Low stock alerts + forecasting	Alertr / Bee / iAlert	$0–$29/mo
Purchase order management	Shopify native or Prediko	Included / $49+
Reporting & exports	CSV + Google Sheets	Free

Getting inventory management right on Shopify isn't about finding the perfect software. It's about having accurate data, a reliable alert system, and a consistent review process. Get those three things working together and stockouts become the exception, not the routine.

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If you want to stop discovering stockouts after the fact, Alertr gives you low stock alerts and sell rate tracking for free up to 50 SKUs — no setup fee, no annual contract. Pro is $29/mo, and if you sign up during beta, that rate is locked in forever. Worth trying before your next busy season.