7 ways to get Etsy inventory management right in 2024

In 2023, more than 9 million sellers sold their goods to 96.48 million buyers on Etsy.

But there’s one significant problem here – a massive portion of these small businesses struggled with inventory management. Issues like stockouts and overstocking are increasingly common, harming both sales and the customer experience. 

These problems are then further compounded by the fact that the majority of Etsy sellers – around 95% – operate from home without large-scale resources, making efficient inventory control critical to their success.

So, what’s the solution?

How does inventory management on Etsy work? 

First, let’s take a look at how inventory management actually works on the platform. 

Etsy offers built-in tools that allow sellers to manage their stock within the platform. You can track your inventory directly through the listing manager, where you set stock quantities for each product. Etsy then updates the available stock in real-time as customers make purchases. Sellers can also implement SKU (Stock Keeping Unit) codes to better organize and monitor their products. 

“As a one-woman producer from start to finish, my Etsy store has been my main online presence since 2009, but inventory has always been the least enjoyable aspect of having an online shop. 

Etsy has by far been the easiest website to work with regarding inventory – the format takes away the scary coding style that many other systems use, and SKU codes are a useful feature for larger producers. The platform is a great starting place for small producers who may have limited webshop technical experience, and its single pricing platform has offered every feature I need and many cool functions I didn’t know I needed.”

– Helen Rhodes, Owner, HWR Designs.

However, while these tools are undoubtedly useful, they are basic. This means they may not scale effectively as your shop grows, which is where third-party integrations come into the mix. 

7 strategies to master Etsy inventory management

Managing inventory on Etsy may feel like juggling ten different things at once – because, well, it kind of is. But don’t worry, it’s not as tricky as it sounds. With a little know-how and the right tools, you can keep things running smoothly…

1. Understand Etsy’s inventory management basics

Managing your stock on Etsy is akin to your virtual stockroom – it may not be glamorous, but it’s where the magic happens. 

Etsy offers a simple, built-in tool that lets you set the number of products you have available for each listing. As soon as something sells, the platform automatically updates your inventory count. So, you don’t have to worry about manually adjusting things. Handy, right?

This real-time tracking is crucial, especially when those unexpected sales rushes hit (hello, peak season). It helps you avoid one of the biggest Etsy no-nos: overselling. The last thing you want is to have a customer place an order only to find out the item is long gone. 

Blue Moon Appliance had this very problem. Human error and poor tracking were leading to lost revenue for their business, plus, the company was selling things that they didn’t have anymore.

“We’ve cut down loads on inventory problems with SkuVault Core. So that’s been really nice. [Managing inventory] is a lot easier with the program because there’s no mistakes, and we’re not double listing things.”

– Jennifer Riley, Online Sales Manager, Blue Moon Appliance

With Etsy’s built-in tools, you can keep your stock levels accurate, preventing overselling but also keeping your customers happy and your reputation intact. Plus, Etsy lets you use SKU codes – those little numbers that help you keep track of specific products. So, whether you’re selling hand-painted mugs or custom jewelry, you can stay organized.

But here’s the catch: while Etsy’s system works well for smaller shops, it can start to feel a bit restrictive as your business grows. If you’re aiming for serious expansion, it might be time to look at third-party integrations that can take your inventory management to the next level.

2. Organize your inventory with clear product categories

If your Etsy shop is starting to feel like an online junk drawer, it’s time to get organized. 

Start by categorizing your products in a way that aligns with Etsy’s existing categories. This not only helps you stay on top of your stock, but it also improves the shopping experience for your customers. When buyers can easily find what they’re looking for, they’re more likely to stick around and ultimately hit that “Buy Now” button.

Another crucial tool in your inventory toolkit is the humble SKU. Think of SKUs as unique fingerprints for each of your products. Assigning a different SKU to each item lets you track it from creation to sale without confusion. Etsy makes it easy by offering a built-in SKU feature so you can monitor stock levels, know exactly what’s low, and restock before it becomes an issue.

Using clear categories and SKUs ensures that your inventory is always under control. Not only does it make your life easier, but it also enhances the shopping experience. Customers can quickly browse through well-organized listings, find what they need, and place their orders with ease.

3. Leverage automation tools for efficient inventory management

We know that running an Etsy shop can sometimes feel like a never-ending to-do list, and inventory management is no exception. 

But here’s where automation tools like Linnworks can make your life a whole lot easier. Linnworks offers Etsy inventory management software that integrates effortlessly with the platform, taking over the repetitive tasks you’d usually spend hours on. Things like updating stock levels, syncing orders, and even managing multiple sales channels if you’re selling on platforms like Shopify too, become a breeze with automation.

The big win here? 

Automating these tasks not only saves you time but also dramatically reduces the risk of manual errors. No more accidentally selling an item you’ve run out of or forgetting to update a product listing after a sale. Linnworks, for instance, allows you to sync inventory across all your selling channels in real-time, so everything’s up-to-date without lifting a finger. 

“With Linnworks we have one location to manage all our inventory and don’t have to assign stock to each separate channel.”

– Luca Salamone, Marketing Manager, Retro Styler

This means you can focus on the fun stuff, like creating new products or connecting with customers, while automation does the heavy lifting for you.

By using automation tools, you can ensure your shop runs smoothly without those late-night inventory panic moments. Plus, it gives you more time to focus on growing your business, which is really the whole point, right?

4. Monitor inventory turnover rates to avoid stockouts and overstock

Inventory turnover is just a fancy way of saying “how fast your products sell and need restocking.” It’s a key metric for Etsy sellers because it directly affects your cash flow and how efficiently your business runs. 

A high turnover rate means your products are flying off the virtual shelves, while a low rate could indicate you’re overstocking or dealing with slow-moving items. Either way, keeping an eye on turnover helps you avoid stockouts (which lose you sales) and overstock (which ties up cash in unsold products).

To calculate turnover, use this simple formula: divide the cost of goods sold by your average inventory. This gives you a rough idea of how quickly you’re selling through your stock. Once you know this, you can make smarter decisions about when to restock and how much to order.

The trick to balancing inventory levels is staying one step ahead of demand without overcommitting. Regularly reviewing your sales data and forecasting upcoming trends can help. And if you’re using tools like Linnworks, you can automate these calculations and get real-time insights into what’s working and what’s not, without tying up precious funds. 

5. Utilize Etsy’s inventory management integrations

Etsy offers a variety of third-party inventory management integrations that can transform how you handle your stock. These tools go way beyond Etsy’s basic features and provide advanced options to manage inventory across multiple platforms. 

For example, Linnworks integrates seamlessly with the platform to give you a centralized hub for all your inventory needs. Whether you’re selling on multiple platforms or just looking for more efficient stock management on Etsy, integrating with an ecommerce solution like Linnworks helps you stay organized and in control.

Linnworks also provides automatic stock updates across all your sales channels, reducing the risk of overselling, and saving you time by syncing your orders in real-time. It’s a game changer for Etsy sellers who want to scale without getting buried under manual inventory updates.

Setting up these integrations is easier than you might think. 

First, you’ll need to connect your Etsy shop to the chosen third-party platform. This usually involves logging into your Etsy account through the integration provider’s site. Once connected, you can configure settings like syncing intervals and SKU management. From there, the tool takes over, automating the process and giving you more time to focus on growing your business.

6. Plan for seasonal demand and trends

Etsy sellers know all too well that demand can fluctuate wildly depending on the season.

Whether it’s a rush for holiday gifts, back-to-school supplies, or even trending products, staying ahead of seasonal demand is key. You need to anticipate these shifts before they happen, ensuring you’re well-stocked during peak times and avoiding overstock when things slow down.

Find out more in this recent masterclass: 

Etsy provides helpful data tools to track trends and see what’s gaining popularity. You can look at historical sales data to predict which items are likely to sell more during certain seasons. Keeping an eye on Etsy’s trending searches can also give you clues about what might be the next big thing.

Once you have a sense of upcoming trends, the next step is adjusting your inventory levels accordingly. Stock up on high-demand items ahead of the busy season, but don’t overcommit to products that might not move quickly. Maintaining a balanced inventory is the key to preventing both stockouts and overstock – two scenarios that can hit your bottom line. Plus, with tools like Linnworks, you can automate inventory adjustments, ensuring you’re always prepared for those seasonal swings.

7. Regularly review and optimize your inventory management strategy

No matter how well you’ve set up your inventory management system, regular reviews are essential to keep everything running smoothly. Conducting frequent inventory audits ensures accuracy and helps catch discrepancies before they become bigger issues. 

Set time aside to check your stock levels against what’s listed in your shop. This simple step can prevent overselling or sitting on products that aren’t moving.

But it’s not just about the numbers. 

Dive into the data insights available from Etsy or your inventory management tools. Look at which products are selling quickly, which are lagging, and what times of the year your sales spike. Then, use this data to adjust your stock levels and product offerings.

For example, if a certain item consistently sells out, it might be time to increase your orders or production for that product. On the flip side, if something’s collecting dust, consider a discount or discontinuing it altogether.

The key to success here is continuous refinement. As your business evolves, so should your inventory management strategy. Regular tweaks based on performance data keep your shop running efficiently, reduce costly mistakes, and help you meet customer demand without tying up cash in dead stock.

Master your Etsy inventory management with Linnworks

There you have it – 7 bonafide ways to take back control of your inventory management on Etsy. 

Yes, it may seem like a challenge at first, but with the right strategies, it becomes much more manageable. By understanding Etsy’s basic tools, organizing your products effectively, and leveraging automation, you can keep your inventory in check while focusing on growing your business. Regularly reviewing your inventory turnover and preparing for seasonal trends will help prevent costly stockouts and overstock, ensuring your shop runs smoothly year-round. And remember, fine-tuning your approach based on data insights is key to long-term success.

If you’re ready to streamline your inventory management even further, integrating a tool like Linnworks can really up your Etsy game. It handles the heavy lifting, from syncing orders across platforms to managing stock levels automatically. 

Book a demo today to discover how Linnworks can help your Etsy shop thrive and give you more time to focus on what you do best: creating and selling amazing products.

FAQs

How to manage Etsy inventory?

Managing Etsy inventory involves using the platform’s built-in tools to track stock levels and ensure accurate listings. You can manually update stock quantities through the listing manager, and Etsy will adjust them in real time as sales are made. 

For more efficient management, especially as your shop grows, you can use inventory automation tools like Linnworks, which automatically syncs stock levels across multiple sales channels, saving you time and reducing the risk of errors.

How to manage inventory between Etsy and Shopify?

If you’re selling on both Etsy and Shopify, managing inventory manually can quickly become overwhelming. Linnworks offers a solution by integrating both platforms, automatically syncing your stock levels in real time. 

This ensures that if a product sells on Etsy, it’s immediately updated on Shopify (and vice versa), preventing overselling and helping you keep everything in sync without the hassle of manual updates.

How to turn on inventory management in Etsy?

To enable inventory management on Etsy, simply go to your shop’s listing manager, where you can set the stock quantities for each product. Etsy will then track sales and adjust the quantities automatically. 

For more advanced control, using a third-party tool like Linnworks allows you to automate stock updates and manage your inventory across multiple channels effortlessly, ensuring you’re always up-to-date.