Shopify’s native inventory management is adequate for stores with a single warehouse and straightforward replenishment cycles. The moment you add a second location, introduce dropshipping alongside held stock, or need demand forecasting, you will hit its limits. Knowing what Shopify handles natively versus what requires an app prevents the common mistake of discovering gaps during a peak trading period.
Multi-Location Inventory Tracking
Shopify supports up to 1,000 locations (warehouses, retail stores, pop-ups, fulfilment partners) on all plans. Each location holds its own inventory count per variant. When a customer checks out, Shopify fulfils from the location you assign — or, with the right app, from the location closest to the customer’s shipping address.
To add a location, go to Settings → Locations → Add location. Assign inventory to each location via Products → [Product] → [Variant] → Inventory. You can transfer stock between locations using Inventory → Transfers — Shopify records in-transit quantities separately so your available stock count remains accurate during the move.
Inventory Policies: Continue or Stop Selling
Each variant has an inventory policy: Stop selling when out of stock (prevents checkout when quantity reaches zero) or Continue selling when out of stock (allows negative inventory, useful for made-to-order items). Choose “continue selling” only when you can genuinely fulfil the order — customers who order a product shown as available expect delivery, not a cancellation notice.
Shopify Plan vs Inventory Locations
| Shopify Plan | Max Locations | Inventory Reports | Demand Forecasting |
|---|---|---|---|
| Basic | 10 | Basic (ending inventory) | Not included |
| Shopify | 10 | Standard (ABC analysis) | Not included |
| Advanced | 10 | Advanced (custom reports) | Not included |
| Shopify Plus | 200 | Full suite | Not included (app required) |
ABC Analysis for Stock Prioritisation
ABC analysis classifies your SKUs into three tiers based on revenue contribution. Shopify’s built-in ABC analysis report (available on Shopify plan and above) categorises products automatically:
- A-grade SKUs — top 10% of products generating ~70% of revenue. Never let these stock out. Set high reorder points and carry safety stock.
- B-grade SKUs — middle tier, roughly 20% of products generating ~20% of revenue. Replenish on a regular cycle.
- C-grade SKUs — long tail. Assess quarterly for discontinuation versus holding cost.
Run this report monthly. A-grade products from last quarter are not always this quarter’s A-grade — seasonal shifts move products between tiers, especially in fashion and gifting categories.
Apps for Advanced Forecasting
Shopify does not offer native demand forecasting. For growing stores, Inventory Planner is the most widely used app — it analyses sales velocity, seasonality, and lead times to generate purchase order recommendations. It integrates with Shopify natively and syncs with Xero and QuickBooks for cost accounting.
Alternatives include Cogsy (good for DTC brands with subscription elements) and Brightpearl (more suited to multi-channel retailers also selling via Amazon or wholesale). All three require clean historical data — at least 6 months of sales — to produce reliable forecasts.
For stores with complex fulfilment operations, a Shopify development partner can integrate your 3PL’s WMS directly with Shopify via API, removing the need for manual stock reconciliation.
Frequently Asked Questions
How do I set a low stock alert in Shopify?
Shopify does not have native low stock email alerts in the admin. You can create an automation in Shopify Flow (available on Shopify and above) that triggers an internal email or Slack notification when a variant’s inventory falls below a threshold you define. Alternatively, Inventory Planner and most forecasting apps include configurable reorder alerts.
Can I do a stocktake (physical count) in Shopify?
Yes, via Inventory → Conduct inventory. You can filter by location and product type, enter physical counts, and Shopify will calculate the adjustment needed. The adjustment is logged with a reason and timestamp. For large warehouses, export the count sheet as CSV, complete it offline, and re-import to bulk-update quantities.
What is the difference between committed and available inventory in Shopify?
Available inventory is stock on hand minus committed inventory. Committed inventory represents units in open, unfulfilled orders. If you have 50 units on hand and 8 committed (pending dispatch), your available quantity shows as 42. This is the figure Shopify uses to determine whether a product can be purchased, so keeping fulfilment timely keeps your available count accurate.
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