Will Shopify’s inventory management tools help you grow in the future?

As a growing Shopify merchant, you may be facing a conundrum: Shopify’s world-class ecommerce suite has supported your success so far – but you may be wondering whether its built-in tools can take you to the next level. As you add fulfillment options, sales channels, and stock locations, change suppliers, or are feeling the heat from FBA inventory demands, you need to take a close look at what tools Shopify provides, and what shortcomings there may be which are actually setting you back.

There are more sales and marketing channels than ever, from buzzy social media platforms like TikTok Shop to more established properties such as Google Shopping. On average, retailers use four different sales channels – and four in five plan to expand from there, according to a survey from payment provider Square.

More channels bring new audiences, but you’ll also be juggling more complexities when it comes to managing inventory and fulfillment. Tracking goods and shipments from multiple sources can be expensive – as much as 20% of sales, according to McKinsey. More channels can also add operational burdens in the form of ecommerce returns, which the NRF found outpace traditional store returns by 73%. To come out ahead, operations need to be optimized for efficiency and agility.   

What’s the best way to do this as a Shopify merchant? As you’ve established a track record of success, you’ve relied on a core set of capabilities – but to scale up, you’ll need to reevaluate so you can move away from manual processes and single-operator solutions. There are six critical areas to consider for Shopify merchants as they consider their inventory strategy, now and in the future. 

Comprehensive Data

Up-to-the-minute information is crucial, as well as the ability to analyze historical inventory data for future forecasting.

Shopify Capabilities: In Shopify, you can view a product’s inventory history for the most recent 90 days. The built-in reporting tool has a month-end snapshot report. 

When it comes to daily tracking, you can view the quantity and percentage of inventory sold, the sell-through rate, and the daily average number of units sold, as well as calculate how many days’ worth of inventory remain for each product. It can take 12-72 hours before inventory changes appear in reports. Low stock alerts are available via third-party apps.

Why you may need more: As mentioned earlier, when the tempo of sales speeds up and sales channels and stock locations multiply, you need more historical sales and order data at your fingertips. Specifically, such comprehensive data enables you to:

  • Avoid out-of-stocks: it’s hard to make sales when you don’t have the stock in hand.
  • Offer flash sale promotions: limited-time deep discounts are popular with customers, but you need to track stock minute-by-minute to ensure you aren’t overcommitted and disappoint customers.
  • Forecast and replenish confidently: historical data going back a year or more gives you a full picture of seasonal trends and peak sales activity.

What Finale offers: Finale syncs inventory data across sales channels and locations in real time, with no more than a 5-minute lag in reporting. Low stock alerts are native in the system, flagging potential problems before they occur. Plus, once your data is in Finale, you can pull up complete historical sales (i.e. beyond 90 days) and order reporting from any point in time, to better forecast seasonality, or do year-over-year or quarter-over-quarter comparisons by way of connection to Google Sheets or another BI tool. (While an external tool, the point is, your historical sales data is available to look at, at any given point in time.) Using the flexible reporting tool, you can design reports for whatever timeframes works for your business – daily, weekly, monthly, quarterly, annually, and custom periods. 
In addition to the report types available in Shopify, Finale offers cost of goods sold (COGS) analysis, landed costs, calculates the average number of units per sales, and tracks sales by source or even category. 

Barcode Scanning

Using a barcode scanner within your warehouse improves speed and accuracy when collecting inventory data and tracking the movement of stock.

Shopify Capabilities: Using Shopify’s mobile app, you can assign a barcode to a product and scan it to increase the inventory count by one, or scan and manually adjust the quantity to record intake of multiple items at once. You can print simple barcodes from the app using a manual process. 

Why you may need more: Integrating barcode scanning data with batch capabilities across the full product lifecycle to include shipping, receiving, stock takes and auditing capabilities streamlines your warehouse operations and reduces errors. Robust barcode scanning enables:

  • Real-time receiving: scan and batch-process items and trigger automated label printing to ensure accurate tracking across your warehouse operations. 
  • Accurate, streamlined shipping: scanning outbound merchandise adds another layer of accuracy to your inventory data. Orders can be synced with scanners to streamline the pick-and-pack and quality-assurance processes.
  • Countless hours saved: when implementing a barcoding system, you reduce labor costs by expediting picking, reduce customer service time spent on returns processing and customer management, reduce time spent on inventory audits, etc.

What Finale offers: Finale’s native barcoding software integrates with a variety of wireless hardware options. Data collected during stock takes, cycle counts, FBA transfer orders, and receiving sync instantly to the Finale IMS. 

On the shipping side of the equation, eligible orders can sync to barcode scanners so warehouse teams know what items to pick and prepare for shipment. Further, Finale can print custom package labels with images and stylized text based on barcode scan data. 

If items you sell have expiration dates, serial numbers, or lot IDs, you can use barcoding to track items on a granular level with Finale and ensure you’re shipping in the correct priority order. Barcoding also helps create a traceable record for compliance requirements, and the stored data can also be used to authenticate returned or trade-in items you offer for resale.  

Further, we know that you likely have a warehouse team vs. one individual picking and packing. Whereas other barcoding systems work best with one person picking and packing or doing stock takes, Finale’s barcoding tool works across teams, allowing simultaneous actions to occur, making your team even more efficient.

Bundling and Kits

Creative merchandising requires nimble inventory practices, including capabilities for tracing availability of grouped items. 

Shopify Capabilities: Shopify offers two native options for tracking bundled items. Fixed bundles can be used for gift sets and other pre-set groupings. Multi-packs contain multiple SKUs of the same item, such as different colors of shirts in a 3-pack, enabling you to track availability of products promoted via “buy one, get one” discount offers. A separate app download supports custom mix-and-match bundles, allowing shoppers to pick their own assortments, and is available for premium Shopify merchants only. Bundle inventory is set to the product with the lowest inventory level in the grouping. 

Why you may need more: The more flexible your bundling options, the more ways you can market and merchandise your products. Advanced capabilities enable:

  • Bulk orders: incentivize shoppers to add more items to their shopping carts with discounts on multiples. Track stock of both bulk quantity packs and items for individual purchase. 
  • Custom assortments: enable shoppers to pick their own lineup of items for a gift box or kit. Track groupings in real time and transmit information to pick-and-pack teams to ensure appropriate packaging. 
  • Subscription boxes: create recurring business by offering a set schedule of shipments, with a varying lineup of goods bundled together each time.  

What Finale offers: Finale’s IMS can track individual kit and bundle components as well as entire sets, whether the bundles are created with a single SKU as a physical kit or whether a virtual bundle is assembled from multiple SKUS. That means you can go beyond simple gift sets and multi-packs to support the advanced bundling features outlined above – and more. If you sell large items that customers assemble themselves, you can track availability of component parts (such as wheels and frames for bikes). You can also use Finale bundling to track bundled items promoted as cross-sells, such as accessories to go with products. 

Finale’s forecasting capabilities proactively suggest reorder points to ensure popular bundles stay available, even during seasons of peak demand. Additionally, you can track and forecast demand for kitted assortments and multi-pack bundles sold and fulfilled via Amazon – opening up new potential revenue streams through unique product groupings that help boost your brand’s visibility on the marketplace. 

Multichannel Selling Support

Offering products on marketplace platforms that offer goods from multiple third-party sellers can heighten visibility for your brand. Leveraging marketplace fulfillment options or third-party logistics providers can ease the accompanying operational demands. 

Shopify Capabilities: In Shopify, you can access and manage inventory for products from multiple locations, which can be defined as stores, warehouses, or third-party fulfillment apps that have multi-managed inventory capabilities enabled. You can track transfers from location to location with tracking number, carrier information, origin, destination, and departure and estimated arrival dates. If you need more sophisticated marketplace inventory tracking, Shopify’s Stocky app integrates with marketplace seller tools. 

Why you may need more: Inventory needs to be synced across your company in real time, regardless of whether the stock is at a physical warehouse, a store location, or a “virtual” warehouse managed by a 3PL provider. With robust integration capabilities, you can support:

  • Seamless Fulfillment by Amazon/Amazon Multi-Channel Fulfillment:. inventory managed by Amazon should be visible in the same tool as your store and warehouse stock. With Shopify, you need to use Amazon’s app or another third-party app that’s a registered Amazon Selling Partner Developer. 
  • 3PL cost control: 3PL providers typically enjoy favorable rates from freight carriers, but fees to retailers can quickly add up for tasks such as receiving, pick and pack operations, handling of returns and product bundles, and more. Syncing orders and stock levels across your entire inventory ecosystem empowers you to route orders elsewhere if a more efficient option, such as fulfill-from-store, is feasible.

What Finale offers: Inventory transfers are handled similarly to Shopify, with more deeply integrated sales channels which provide comprehensive sales order data in real-time. In addition to stores, warehouses, and Shopify ecommerce sites, Finale’s IMS integrates directly with Amazon FBA/MCF, as well as eBay, Walmart, Faire, Etsy and up-and-coming marketplaces such as TikTok. Finale also supports temporary stock locations for pop-up shops or even for upcoming sales promotions.

Low Stock Management

Close attention to product stock levels is a must, as is a strategy for managing items that are in demand and frequently out of stock. Automating how products are promoted and displayed on the ecommerce site based on their stock status is a must to keep information timely and customers satisfied.

Shopify Capabilities: By default, items that are out of stock are still displayed in product listings, but the platform doesn’t allow you to continue on and then purchase items as needed. Unavailable items can be hidden using Shopify’s automated collections tool and/or a third-party inventory app. 

Why you may need more: Savvy strategy when it comes to out-of-stocks can earn more sales than a binary show versus hide option. With granular controls at the product level, you can:

  • Encourage pre-orders: enable sales and even promote items that are due to arrive soon. Creating anticipation can even encourage more sales of exclusive or scarce items. 
  • Sync inventory with personalized picks: downplay items that are out of stock so they don’t show up in product recommendations, search results, or email marketing. 
  • Set stock buffers for marketplaces:.third-party platforms like Amazon assign seller ratings based in part on availability of items. Delays in fulfilling items can lower your ratings, which in turn impacts your brand’s visibility and revenue on the platform. 

What Finale offers: Shopify sellers can leverage Finale’s native functionality to turn the availability of products on or off (which then signals to sales channels products are or are not available to sell), or to enable pre-sales or backorders. In addition, Finale sellers can set minimum and maximum stock thresholds by channel and location, so that adequate buffers are in place for orders to be fulfilled in a timely manner.

Supplier POs and Demand Forecasting

As the number of products, sales channels, and locations increase, predicting demand becomes more complex and time-consuming. 

What Shopify Offers: You can manually create purchase orders for suppliers and mark shipments as received. In addition to downloading inventory reports to use in analysis, customers on the Premium plan can access basic ABC reports that assign a simple ranking system to products based on sales so you can prioritize tracking of inventory for your most valuable items.

Why you may need more: Tools that help forecast accurately and proactively prompt reorders help you serve customers better. With predictive and automated features, you can streamline operations by:

  • Uniting inventory data and financials:export to QuickBooks Online, Google Drive, Microsoft 365, and more, make it possible to build comprehensive, end-to-end reporting.
  • Calculating min/max levels: avoid out-of-stocks and overstocks by setting minimum and maximum stock levels, so you reorder just enough to meet demand. 

What Finale offers: Finale’s system incorporates the functionality above and builds on it to offer data-informed purchase orders that automatically trigger alerts based on sales velocity or min/max levels  for when it’s time to reorder. Either way, order amounts are pre-populated into purchase orders  (with the ability to change amounts if desired), so that there’s no second guessing what the right amount is. Plus, with exporting to Google and even Power BI, streamed data for in-depth analysis is seamless.

With tracking of inbound shipments, you can plan ahead to sync new stock levels to your sales channels easily within Finale. An integration with QuickBooks Online streamlines reporting so you can spend less time manually merging spreadsheet data and more time on strategy and operational execution.

Conclusion: Stepping up capabilities for next-level success

Shopify’s industry-leading ecommerce engine provides all the basics for getting your business up and running, and its speciality is providing online storefronts, product listing tools, and digital marketing features that provide visibility and drive sales. Starter inventory tracking tools help manage online sales alongside store transactions as you launch your business. 

Operational management isn’t Shopify’s main focus, however. As you expand your offerings, online sales channels, and marketing efforts, you need a purpose-built suite of capabilities on the back end to match Shopify’s excellent front-end sales generation. Orchestrating your inventory across channels, accurate forecasting and seamless fulfillment maximize efficiency and customer satisfaction. Plus, as you grow, you look to operate more efficiently and more profitably beyond a baseline focus to get sales and ship orders out. 

A specialized IMS platform like Finale that integrates with Shopify, Shopify Plus, and even Shopify’s POS, provides the robust inventory and warehousing management capabilities you need to make informed decisions, grow sustainably and scale your business for long-term success. 
Talk to the Finale team about how to grow through inventory.