In retail, inventory is fluid, constantly changing based on sales, returns, and restocking. This can add complexity for retailers. A customer might request a product that, according to your inventory system, is available. Upon checking, you may find the product is committed to another purchase order—or it’s in transit from a different store location. Regardless, it’s not in your on-hand inventory, which means you’ve missed a sales opportunity.
Avoiding this mishap is why understanding the exact inventory status—of every single item—is a necessity. This article will delve into the importance of inventory status, explain the different inventory states in a point-of-sale (POS) system, and guide you through creating and managing inventory statuses.
What is an inventory status?
An inventory status is a real-time snapshot of a retailer’s stock. It includes various categories that reflect the current conditions of items, such as their availability for sale, their allocation to specific orders or transfers, and the transit status between locations. Inventory status provides detailed insights into what’s on hand, what’s available, what’s committed, what’s unavailable, and what’s incoming.
Knowing how to categorize inventory helps you maintain accurate stock levels, helping you avoid both overstocking and stockouts. It also facilitates better warehouse management and prompt order fulfillment. An accurate inventory status aids in making strategic decisions, allowing you to identify product trends, coordinate effective supply chain management, and improve inventory forecasting.
How does Shopify POS inventory status work?
Shopify POS is a point-of-sale system that can streamline the process of selling in-store or online. Its inventory status feature offers clear insights into stock levels, showing product quantities by location and availability. For each of your store or warehouse locations, Shopify POS identifies the following inventory states:
- On-hand. This represents the total count of inventory physically present at a location. It is calculated by adding the available and committed inventory and subtracting any unavailable stock.
- Available. This refers to the stock that is currently ready for sale.
- Committed. This category includes inventory that is not available for sale due to it being allocated to a store transfer or tied up in an order awaiting fulfillment.
- Unavailable. The unavailable status denotes stock that cannot be sold because it’s sold out or earmarked for an unfulfilled store pickup or online order.
- Incoming. This represents inventory that is en route from another store location. Until it arrives and its state changes to Available, this inventory cannot be sold.
With more complexity than just categorizing inventory as available or out of stock, this system captures the nuances of inventory management, aiding you in keeping your retail business synchronized and efficient. When a product is sold, the system will automatically change the inventory status.
How to view and modify your inventory states on Shopify
To view and manage your store’s inventory status dimension in Shopify, follow these steps:
1. Log in to your Shopify admin panel.
2. From the dashboard, click on Products, located in the sidebar menu.
3. Select Inventory from the drop-down menu. Here, you will find a comprehensive list of all your products along with their inventory states.
4. You can click on an individual product to view more detailed information, modify inventory state details, and see your inventory adjustment history.
You can also view your inventory states on Shopify’s POS by following these steps:
1. Log in to the Shopify POS admin panel.
2. From the bottom menu, navigate to the Products section.
3. Click on the product you would like to view.
4. In the Inventory section, you can view how many units of the product belong to each inventory state.
Having access to your inventory states within your point-of-sale system is invaluable for an ecommerce store with a physical store or regular pop-up events. It ensures real-time tracking and management of inventory across all sales channels by letting you see when there’s been an inventory status change.
This helps prevent stock discrepancies and sales conflicts, and it also supports customer satisfaction by ensuring product availability and prompt fulfillment across both online and offline sales platforms.
Inventory status FAQ
What is an inventory status report used for?
An inventory status report is used to provide an overview of a retailer’s stock condition, including details such as quantity, location, and availability. It provides you with the information you need for inventory management.
How often should inventory status be updated?
Inventory statuses should be updated in real-time or at least daily, ensuring accurate and prompt responses to changes in stock levels. Shopify POS is a point-of-sale system that tracks your inventory status in real time.
What information does inventory status provide?
Inventory status provides crucial information about the quantity and location of items, their availability for sales orders, and their commitment to a specific sales order or transfer.
How can knowing inventory status support my retail business?
Knowing your inventory status can help you manage your production orders—the upcoming shipments of products from your manufacturer. Understanding your stock levels informs master planning, aiding strategic decisions about inventory that drives business growth.
What challenges can arise from inaccurate inventory status information?
Inaccurate inventory status information can lead to challenges like overstocking or understocking, mismanaged order fulfillment, decreased customer satisfaction due to unmet expectations, and distorted data leading to flawed strategic decisions.
