Poor inventory management is one of the biggest profit killers for Shopify stores. Here are five common mistakes and how to avoid them.
1. Not Tracking Inventory Velocity
Inventory velocity measures how quickly products sell. Many merchants treat all inventory the same, but fast-moving items need different management than slow sellers.
**The Fix:** Segment your products by velocity. Keep more stock of fast movers and minimize slow sellers.
2. Ignoring Lead Times
If your supplier takes 3 weeks to deliver, you can't wait until you're out of stock to reorder. Many merchants underestimate lead times and end up with stockouts.
**The Fix:** Calculate your reorder point: (Average daily sales × Lead time) + Safety stock
3. Over-ordering "Just in Case"
Fear of stockouts leads to over-ordering, which ties up cash and increases storage costs. Dead stock is money sitting on shelves.
**The Fix:** Use data to determine optimal order quantities. A 90-day supply is usually plenty for most products.
4. Not Accounting for Seasonality
Selling swimwear? Your January inventory needs are very different from June. Many merchants get burned by not planning for seasonal shifts.
**The Fix:** Track year-over-year sales patterns and adjust inventory levels accordingly.
5. Manual Tracking
Spreadsheets work until they don't. Manual tracking is error-prone and time-consuming. One typo can lead to major problems.
**The Fix:** Use automated inventory management tools that sync with your Shopify store in real-time.
The Bottom Line
Good inventory management isn't sexy, but it directly impacts your bottom line. Every stockout is lost revenue. Every unit of dead stock is tied-up capital.
Cipzo's inventory intelligence helps you avoid all these mistakes with predictive restocking, dead stock alerts, and automated tracking.