Managing Inventory with Shopify Plus, Is it Enough?

Managing Inventory with Shopify Plus, Is it Enough?

author Lisa Schwarz | Product Marketing

Shopify Plus adds inventory management functionality to Shopify, but is it enough for all your needs? Learn what inventory challenges you could be facing and what integration could make Shopify Plus the right choice for you.

In this article:

Overview of Shopify Plus Inventory Management System

Shopify’s capabilities to manage the 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:

Organise 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 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 you also take the time to think through how you will want to analyse 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 analyse.

Create product variations

To further organise, 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 colours 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 analysed. These alerts can prompt purchase orders or production so new stock is available before you run out.

Run reports

With inventory, orders and sales being tracked through the inventory management system you’re able to run reports to analyse how your products are performing. Utilising product classifications you can easily filter your products so you can analyse 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, as you begin selling through additional channels, or you expand your business 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 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 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 warehouse or having to ship from multiple warehouses to fulfil a single order, all increasing shipping costs.

Inventory/demand planning:
A major part of an inventory management system is understanding demand so you can produce 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 the 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 you can fill customer orders 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 is robust and 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 fulfilment, you can minimise 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 customised, real-time overview of the business, with pre-built KPIs, reminders and shortcuts that eliminate the time consuming task of pulling reports manually. Schedule a free consultation to learn more about integrating NetSuite inventory management with your Shopify Plus business.

Schedule a free consultation to learn more about integrating NetSuite inventory management with your Shopify Plus business.

Shopify Plus With NetSuite Customer Testimonials

Corkcicle NetSuite + Shopify case study

Corkcicle, named one of the Inc 5000 fasted growing companies, implemented NetSuite in 2014 to optimise operations and provide advanced analytics and 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.”

Read more about Corkcicle’s success since implementing NetSuite, here.

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