How to handle your online shop’s inventory (with the quickest and easiest options)


Do you struggle when dealing with your shop’s inventory?

If that’s the case, you’re not alone. Handling inventory is one of the most tedious tasks a business can have, but if you know how to do it properly, your business’ profitability may increase.

And that sounds great, right?

In this post, we’re going to explain how to handle inventory in the fastest and simplest way possible so that you can focus on what really matters – selling.

Are you ready? Let’s go.

Why it’s so important to keep inventory in your ecommerce

You already know that an inventory is a detailed and organized list of all the goods and their values that form your online shop’s offering at any given moment.

Think about the consequences of a poor management of these goods:

  • Unhappy clients
  • Lack of stock
  • Poor demand prediction
  • Financial problems

That’s why it’s so important for you to monitor your levels of stock at all times. Just by doing that, you’ll be able to guarantee that your business runs properly.

And if you want to sell more and improve your overall conversion rate, you need to know how to keep a good inventory that allows you to manage your products.

Let’s see how you can do it yourself.

Types of inventory that you can do for your ecommerce

You can do your inventory whenever you want and as often as you want. You can even do inventory according to the types of products you sell or the size of your warehouse.

Remember, counting screws (if you have an online hardware store) is not the same as counting shirts (if you have a fashion shop).

We are going to explain the three most common and efficient types of inventory for online businesses.

1. Annual inventory

The one done at the end of the year is mandatory by law, so you can’t skip this one.

If you have limited stock, this alone may be enough. You just need to take inventory once a year so that everything is under control.

However, if your warehouse is big, it might require a huge investment in terms of time and human resources, so you may want to do it more than once a year.

2. Cycle inventory

This method is all about organizing your stock “in shifts”.

Instead of checking all the supplies at once, your warehouse is divided into different parts and the inventory of each part is scheduled individually throughout the year.

It’s an easier option than the annual method and simpler to put into practice.

3. Ongoing inventory

This is our favorite option:

An ongoing inventory registers each time a product enters or leaves your ecommerce in real time so that the stock is always up to date.

This is the most recommended way of taking care of your shop because:

  • You avoid lack of stock: You’ll never run out of a product and, therefore, you’ll never leave a client without a product (which is especially relevant for online shops).
  • It allows precise assessment of your warehouse: The count will match reality at all times.
  • It eases the purchase planning: You’ll always know the available quantity of each product so that you’ll be able to plan restocking (for example, for special dates such as Black Friday or Christmas).
  • It helps sales management: By having each product identified, you’ll be able to analyze which ones have less rotation and you’ll be able to apply discounts or special offers to sell them before the lose their value (which is essential if you sell perishable products).
  • It saves you time and money: In the long term, you won’t have to do those long inventories at the end of the year. 😉

So, how do you do it?

The trick is to update clients’ purchases and suppliers’ sales each day (and to read the next section of this post carefully). 😉

How to carry out an ongoing inventory for your online shop

You already know the theory behind making your ecommerce can work and grow: monitor your stock levels with detail and precision.

Let’s see how you can put that into practice using the most common platforms. We’re also giving you some other options in case you don’t use any of them.

Let’s get to it!

1.Inventory with WordPress

More specifically, this is with WooCommerce, since inventory management is a “default” option of this WordPress plugin.

In order to activate it, you need to follow these easy steps:

  • Click “Menu” and look for the option “Settings > Products > Inventory”.
  • Click the box “Activate stock management” so that it’s done automatically.

Once you’ve done that, you’ll see 8 settings options to monitor your total stock, although there are only two that are particularly useful:

  1. Low Stock Threshold: Select how many units you’ll need to have left before you order more from your suppliers (you should define this in accordance with your stock rotation).
  2. Notifications: You can enable email notifications from WooCommerce when a product has reached a low threshold.

The downside is that you need to do this manually for every product – but only the first time. To get started, follow this process:

  • Go to “Settings”.
  • Look for “Products”.
  • Click “Inventory”.
  • Activate the “Manage Inventory?” box.
  • Finally, enter the number of products in “Quantity”.

And, that’s it, your WooCommerce inventory is ready.

2. Inventory with Magento

If you use this platform, you can manage your stock through Magento2 (the new and improved version of Magento), right from the admin panel.

There are two options to manage inventories, both available under Shops > Settings.

Here you have an explanation for both.

A. The general way (applicable to all of your products)

In “Stock Options”, when you uncheck the box “Use System Value”, you can modify values manually.

Bear in mind that this modification will apply to all the products in your shop.

B. The advanced way (for each product individually).

If each of your ecommerce products needs individual management, choose this option by following the next few steps:

  • Open “Configuration”.
  • Search the option “Catalog > Inventory > Product Stock Options”.

This way, you’ll be able to define each product’s quantity, which will be great to control your business’ inventory.

3. Inventory with Shopify

Managing stock is also an option with Shopify. To do so, follow this process:

  • Open the Admin area.
  • Look for the option “Products”.
  • Click “Inventory” and activate “Shopify tracks this product’s quantity”.

This way you’ll be able to see all the products with tracking activated and you’ll be able to monitor your stock levels and apply timely changes as needed.

4. Inventory with PrestaShop

To make it work, you need to activate this option under “Manage product quantities” from the “Advanced Stock Management” menu.

You’ll find it under “Products > Product Stock > Enable advanced stock management.

PrestaShop allows you to differentiate between two types of products:

  • Products available for sale: those that are shown on your website so that clients can buy them.
  • Physical supplies in your warehouse: the real quantity in the warehouse. That’s to say, all the products ordered from the suppliers minus the ones bought from clients but that haven’t been sent out yet.

This is what lets you have a real overview of your supplies and what will ultimately facilitate the restocking and sales management process.

5. Inventory with Excel

Even though every platform, as we’ve just seen, has its own stock management system available, you may want to design your own customized system.

That’s why Excel spreadsheets are a very useful and easy-to-use tool.

Important: Excel is only useful when you don’t have too many items since you’ll have to register each of them individually (though that could be sped up with the use of a barcode reader).

If you design a proper template and you use Excel formulas correctly, you’ll be able to monitor your inventory in a precise and reliable way – and not to mention, cheap.

Let’s see it step by step:

A. Create your product table in Excel

Name your first sheet “Item Availability”.

In each column, write the data you’ll need for your inventory. For example:

  • Name of the product: to identify it
  • Code: use the same one as in your ecommerce
  • Description: not too long
  • Quantity available: the quantity at the moment of creating the table
  • Incoming: purchased items that are arriving
  • Outgoing: sales to be sent
  • Total: this cell will calculate itself – we’ll see it in section C.

Add your preferred design to make it visually appealing and fill in the cells (up to “Item Availability”).

B. Type the daily incoming and outgoing quantities

Fill in the Incoming and Outgoing number of each product as often as you can so that all the information will be up to date.

This is one of the tasks that you should schedule weekly – at least – although it depends on the volume of purchases and sales that you have.

Tip: If you want to know how to be more productive when managing your business, ➡️ we recommend reading this post.

C. Apply formulas

To make the inventory keep itself up to date automatically, you need to enter a formula in the “Total” column that adds the purchases and deducts the sales.

The formula to know the item availability is =SUM(Item AvailabilityCell+IncomingCell-OutgoingCell).

By using this easy (and cheap) method, you’ll be able to keep your inventory updated and know the real situation of your warehouse at any give time.

Use the inventory management system that best fits you and your ecommerce

By putting all these tips into practice, you’ll save a lot of time and money. You won’t have to stop everything else at the end of the year to start counting supplies.

The best thing about it is that the time you save can be used to design sales strategies that will help you increase your profits.

After all, the goal is to sell more and to do it better, right? 😉