10 best practices for Shopify inventory management in 2025

Getting inventory management on Shopify right can make or break your ecommerce success in 2025. 

Shopify powers over a million ecommerce businesses worldwide — and so it’s dominance is indisputable. Staying competitive on Shopify means not only leveraging their built-in tools but also optimizing your inventory processes.

In this article, we share 10 best practices that combine Shopify’s strengths with smart strategies and the right tech to elevate your inventory management process in 2025.

Shopify inventory management: What you need to know

Shopify’s inventory management tools offer a solid foundation for small to mid-sized businesses looking to streamline stock management. While not exhaustive, they cover key essentials that help keep your operations running smoothly, including:

• Inventory tracking: Monitor stock levels across multiple locations in real-time to avoid overselling or stockouts.
• Stock adjustments: Easily update inventory counts to reflect returns, damages, or incoming shipments.
• Bulk editing: Make updates to multiple products at once, saving time on repetitive tasks.
• Low stock alerts: Set thresholds to receive notifications when it’s time to reorder.
• Multi-location support: Track and manage inventory across multiple warehouses or retail locations.

These features are great for businesses just getting started, but as you scale, the complexities of managing inventory across multiple channels or locations can outgrow Shopify’s native capabilities. 

10 practical steps to level-up your Shopify inventory management 

Managing inventory effectively goes beyond avoiding mistakes — when done right, it can unlock growth, too. Shopify’s features give a solid starting point, but it’s vital to build a strategy that incorporates best practices and ensures that you’re not leaving money on the table. 

To help on this journey, we’ve pulled together 11 actionable steps that take your inventory management to the next level. From automation to analytics, these tips are designed to help you save time, reduce costs, and focus on growing your business.

1. Understand the limits of Shopify’s inventory management capabilities

Does Shopify do inventory management? Absolutely. Shopify offers a built-in inventory system that allows you to track stock levels, set reorder points, and manage multiple warehouse locations. And for smaller businesses, these features are probably adequate.

However, as your business grows, so too do the complexities of managing inventory. And soon enough, you’ll reach a point that Shopify’s native tools lack the scalability that’s required to handle your ecommerce operations effectively. 

That’s when integrating platforms like Linnworks becomes essential. Linnworks enables you to power your entire ecommerce operation, providing full inventory management from promotion on hundreds of marketplaces, to order management to warehouse management with full control of shipping orchestration  from a single, centralized platform. 

2. Get inventory tracking set up correctly 

Getting your inventory tracking right is the bedrock of effective Shopify inventory management. You need to be able to track stock across multiple locations, update quantities automatically, and monitor inventory adjustments in real-time. Setting this up correctly ensures you’re not only avoiding stockouts but also preventing overstocking — both of which can hurt your bottom line.

To enable Shopify inventory tracking, navigate to your product settings, select “Track quantity” and establish alerts for low stock levels. For businesses juggling hundreds or thousands of SKUs, platforms like Linnworks can take this further by automating updates across channels, giving you a bird’s-eye view of your inventory health.

3. Leverage multi-channel inventory syncing

Managing inventory across multiple channels can quickly become unwieldy, so it’s important you take a step back and focus on the systems that will support your entire ecommerce business — not just how you sell on Shopify. 

Shopify offers functionality to help you sync stock, but once you expand beyond one platform, that’s when you’ll need to consider more robust inventory management solutions. This is where Linnworks shines. No matter where you sell, Linnworks ensures that your inventory is updated in real-time, and removes the need for manual updates and human errors. 

4. Use barcoding for better inventory organization

Barcoding isn’t just for massive warehouses — it’s for businesses of any size. By assigning barcodes to your products, you can quickly scan items into your inventory, streamline fulfillment, and reduce errors.

Shopify allows you to integrate barcode systems, and pairing this with warehouse management software like SkuVault Core supercharges efficiency and unlocks opportunities for growth. SkuVault Core’s barcode scanning tools make stock-taking, packing, and inventory updates almost effortless, even for businesses managing thousands of items. Plus, having barcodes in place sets you up for faster processing during seasonal sales or promotions.

5. Automate inventory updates

Manual inventory updates are a thing of the past. Automation is key to managing Shopify inventory efficiently and scaling your operations without burning out your team. Shopify’s inventory tools allow basic automation, like syncing stock levels with sales, but pairing them with a solution like Linnworks can take your automation game to the next level.

Linnworks connects directly to Shopify and other sales channels, automating everything from stock updates to shipping rules. When an item sells on Shopify, Linnworks ensures your inventory levels are adjusted across all platforms, reducing the risk of overselling or discrepancies.

6. Optimize inventory forecasting

Planning ahead is critical for avoiding stockouts and overstocking. Shopify provides historical data to help predict demand, but it may not offer the nuanced insights you need to scale. For more robust forecasting, tools like Linnworks can analyze trends across multiple channels and locations, giving you the clarity to make smarter purchasing decisions.

For example, according to McKinsey, companies that invest in data-driven demand forecasting can reduce forecasting errors by up to 50%, leading to significant savings on carrying costs and improved customer satisfaction.

7. Manage seasonal inventory effectively

Seasonal demand can be both a blessing and a challenge. Shopify’s built-in features allow you to monitor inventory levels, but staying ahead of demand spikes requires careful planning. Identify your best-selling seasonal products early and leverage data from previous years to prepare for holiday sales or promotional events.

Platforms like SkuVault Core helps streamline your warehouse operations during high-demand periods. By optimizing picking paths and batch processing, you can keep up with order volume without overwhelming your team.

8. Implement inventory rules and thresholds

One of the simplest yet most effective strategies in inventory management is setting rules and thresholds. Shopify allows you to set stock alerts when inventory dips below a certain level, ensuring you’re never caught off guard. For businesses handling complex inventories, advanced tools like Linnworks can create custom rules tailored to your needs.

For instance, you can set rules to prioritize certain sales channels during stock shortages or automatically transfer stock between warehouses based on demand. The NRF’s 2023 National Retail Security Survey revealed inventory shrinkage accounted for an average loss of 1.6% of sales for retailers, underscoring the importance of clear rules and robust inventory controls.

9. Audit inventory regularly

Regular audits ensure your records align with what’s actually on your shelves. Shopify’s inventory adjustment tools let you track discrepancies, but performing physical counts periodically adds an extra layer of accuracy. These audits help you identify issues like theft, damage, or miscounts that could otherwise fly under the radar.

For larger operations, leveraging Linnworks or SkuVault Core simplifies this process. These platforms allow you to conduct audits digitally, making it easier to reconcile your records and flag discrepancies quickly.

10. Monitor inventory performance closely

Your inventory tells a story — if you’re willing to listen. Shopify’s analytics provide insights into sales trends, inventory turnover, and product performance. But for more advanced analytics, integrating Linnworks can offer a deeper dive into multi-channel data, giving you a single source of truth across your entire ecommerce operation.

Track which products are moving quickly, which are underperforming, and how long inventory sits in storage. As reported in the Wall Street Journal, companies like Target have leveraged inventory management technologies to trim excess stock by billions, underscoring the value of analytics in optimizing inventory efficiency.

Supercharge your Shopify inventory management

The right tools can only take you so far without smart strategies in place. That’s why these best practices are your secret weapon for turning Shopify’s inventory management into a well-oiled machine. When you combine them with cutting-edge technology, the results are game-changing.

Imagine effortlessly connecting channels, organizing warehouses, and automating inventory updates — all with features like barcode scanning baked right in. That’s what you get with Linnworks.

If you’re ready to take your Shopify inventory management to the next level, book a demo with Linnworks today and find out just how effectively your ecommerce operations can be managed in 2025 — and beyond.