Overview of Shopify Plus Inventory Management System
Shopify’s capabilities to manage inventory that flows through the commerce solution are limited. The commerce solution includes standard inventory management functionality, which lets you increase inventory visibility and decrease the manual process of spreadsheet management. With Shopify’s inventory management system, you will be able to:
Organize Your Products
Entering your products in Shopify’s inventory management system is the first step in tracking inventory, orders and stock levels. You’ll need to give each product a unique name and assign it to a barcode—you can choose to use an existing barcode or create a new one. Barcodes will be the unique identifier used to track products in the system.
To get the most out of your Shopify inventory management system, it’s essential that you also take the time to think through how you will want to analyze sales and what information you’ll need for future forecasting,
and classify your products accordingly. You can group products by category, type, season, vendor and more. By properly grouping your products at the onset, you’ll be able to sort your products and run reports that give you the information you need and are easy to analyze.
Create Product Variations
To further organize and properly report on your products, it may be important to create multiple versions of a single product (think a shirt that comes in six colors and four sizes). Each variation can have its own SKU, price, weight and inventory number. Creating product variations allows you to report on a single SKU or as a whole.
Track Stock Levels
Central to any inventory management system is the ability to track and maintain inventory levels to avoid stock outs and potential lost sales. Shopify’s inventory management system tracks stock counts flowing through the commerce solution. To be more proactive you can set automated alerts when a count hits a certain number,
this way you are automatically alerted when an item is running low instead of waiting until a report is run and analyzed. These alerts can prompt purchase orders or production so new stock is available before you run out.
With inventory, orders and sales being tracked through the inventory management system, you’re able to run reports to analyze how your products are performing. Utilizing product classifications can easily filter your products so you can analyze them in multiple ways, giving you a better understanding of your business, opportunities and future needs.
Challenges of Only Using Shopify Plus for Inventory Management
At its core, Shopify is an ecommerce solution. It can be extended to provide basic inventory management functions—if your needs are simple and straightforward.
As your business continues to grow, as you launch new products, begin selling through additional channels or expand internationally, your inventory needs become more complex.
Shopify’s inventory management won’t be enough. You’ll need to upgrade to a robust inventory management solution with additional functionality to run your business at scale.
Industry best practices not available on Shopify’s inventory management system include:
- Omnichannel inventory depletion: If you sell anything that doesn’t flow through the Shopify system, you will not have visibility to see it within the inventory management system unless you manually input these sales. This means you will never have real-time inventory visibility and run the real risk of overselling items that you are not able to deliver.
- Multi-location/multi-vendor order orchestration: If you store products across multiple warehouses, orchestrating and fulfilling orders with multiple products can be cumbersome and costly. Because Shopify inventory management does not have the ability to set rules for determining which warehouse a product shipment originates from, you may end up paying to ship a product across the country when it is also available at a closer warehouses to fulfill a single order, all increasing shipping costs.
- Inventory/demand planning: A major part of an inventory management system is understanding demand so you can product the right amount of product. Shopify inventory management does not have a demand planning component, meaning you will need to run and export an inventory report and then either upload it into a demand planning tool or manually calculate your demand on a spreadsheet.
- Product information management (PIM): Shopify can be used to house inventory, but it does not act as a PIM. The Shopify item master only holds data for the website, but it is not a robust item master and will not serve as the record of truth. This means as changes are made to an item, such as price or description, these updates will need to be made in the Shopify Plus item master as well as in inventory record and any other system of record. Not only does this require undue work, but it also increases the risk of errors and inaccuracies.
Why Oracle NetSuite Integration is a Solid Choice
NetSuite’s inventory management system gives you a single, real-time view of items, inventory and orders across all channels, ensuring customer orders are filled quickly and accurately. With a suite of native tools for tracking inventory in multiple locations, determining reorder points, managing safety stock and cycle counts, you’re able to efficiently manage inventory levels and availability.
- System of record: NetSuite’s item master lets you store a product’s information, in its entirety, in a single place, ensuring consistency in messaging, pricing and availability across channels as updates are made. It decreases the manual time and effort of making product updates in multiple places.
- Intelligent order orchestration: Using a set of pre-defined rules for order fulfillment, you can minimize handling and shipping costs by fulfilling orders from multiple vendors or warehouse locations efficiently.
- Demand-based inventory replenishment: NetSuite provides intelligent control over inventory replenishment so you can ensure sufficient stock is on hand to fill anticipated orders while keeping excess stock to a minimum.
- Inventory Control: NetSuite enhances inventory visibility with tracking and control capabilities to manage every stage of the lifecycle and control costs.
- Inventory process management: NetSuite automates workflows of core processes to simplify complex tasks.
- Reporting and customer insight: Role-based dashboards give different users a customized, real-time overview of business, with pre-built KPIs, reminders and shortcuts that eliminate the time consuming task of pulling reports manually.
Corkcicle, named one of the Inc 5000 fastest growing companies, implemented NetSuite in 2014 to optimize operations and provide advanced analytics reporting.
By using multi-location inventory management across 3PL partner sites in Atlanta, Salt Lake City and the Netherlands, Corkcicle has increased distribution to nearly 40 countries and boasts sales in 4,000 retail locations in the U.S. alone.
“Integrating NetSuite with Shopify gave us the information to ensure the right inventory is available when our customers want it. Together, these systems allow me to run my business in a way that puts our customers first.”
– Blake Thomas, Chief Operating Officer, Corkcicle