POS, Shopify

Shopify POS Inventory Management: A Step-by-step Guide

January 23, 2025 Finn Nguyen

Inventory management is critical, especially when selling via omnichannel, including an e-commerce platform. As a result, many POS systems have provided easily understandable tools to meet this need.

Of course, Shopify is not the bystander in this situation. That is why they provide Shopify POS inventory management features to assist you in effectively performing all of the necessary tasks. In this blog, we will walk you through a brief overview of the POS system, the tool, and its key features.

1. Shopify POS: At a Glance

1.1. What is Shopify POS?

The Shopify Point-of-Sale (POS) system is software that was created to help you manage your business more efficiently and easily, including inventory management, customer data, and staff management.

Specifically, the system provides extremely powerful and useful tools for those who want to sell across multiple channels. For instance, Shopify POS inventory management system allows you to check stock levels in real-time in both your physical and online stores, ensuring that you never run out of stock.

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Check out the Shopify POS system now!

1.2. What are the key features of Shopify POS?

In particular, Shopify POS is an effective tool for managing and running your business both online and offline. The most prominent features are:

Customer relationship management

Shopify CRM is an essential tool for storing and easily tracking all of your customers’ data, including purchase history, preferences, loyalty points, and so on. Based on this information, you can approach them with appealing personalized promotions and programs.

Omnichannel experience

Your customers will experience shopping on omnichannel with seamless and consistent sales programs, while your burden will be reduced as you can now manage both online and offline sales in just one unified platform.

Hardware integration

The Shopify POS system is compatible with many popular hardware devices on the market. This means you will have plenty of options for your store and can improve the customer experience with barcode scanners, receipt printers, cash drawers, and so on.

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Sales processing

Sales processing with the Shopify POS system is the best solution for omnichannel sales. To be more specific, the system accepts multiple payment options from cards to digital wallets, efficient order management, and promotional programs.

Inventory management

Shopify POS inventory management is crucial because it allows you to track your stock levels in real-time across all channels, manage product checkout with clever tools like barcode scanning, and receive alerts when your stock is low to avoid running out.

💡 For a more detailed review of Shopify POS features, check out our blog on Shopify POS review here.

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Also, scroll over to dive deeper into the Shopify POS inventory management tool and learn how to use it effectively for your future Shopify store.

2. Shopify POS Inventory Management Overview

2.1. Overview

Shopify POS inventory management is a powerful tool in the Shopify POS system. The tool allows you to effectively manage and track your stock levels across multi-channel management, ensuring accurate inventory counts in real-time so that your store runs smoothly and meets all of your customers’ needs.

2.2. Pros and Cons

Following an overview on the tool’s definition, check out the table below to understand the pros and cons of this Shopify POS product management tool.

Pros

User-friendly interface even for beginners or those without coding knowledge
Real-time inventory tracking across all selling channels online and offline, ensuring accurate stock counts
Low stock alert automation to prevent out-of-stock scenario
Bar code scanning for a scientific and efficient way of stock updates and tracking
Inventory reports in terms of levels, sales trends, etc.
Seamless integration with the Shopify platform to track inventory of omnichannel selling in just one unified platform

Cons

Limited advanced features when compared to other paid POS system
The additional and hardware fees may be high, although the system itself is free
Limited customization options
Demand a stable internet connection for real-time inventory tracking, so it may not work effectively in case there is no internet connection

2.3. Suitable for and not suitable for

Overall, businesses of all sizes and in a variety of industries will find the Shopify POS inventory management tool to be an excellent option.

👉🏻 Specifically, the tool is most suitable for:

Businesses that want to sell both online and in physical stores and require an effective tool to manage inventory on Shopify POS across selling channels in real-time
Stores want to integrate inventory management with Shopify POS into their e-commerce platform to streamline operations and have a unified platform for inventory management
The majority of stores are small to medium-sized, and they place a high value on affordability and usability rather than fancy features

👉🏻 On the other hand, the tool is not suitable for:

Stores with numerous warehouses, a sizable and intricate inventory list, and a large number of SKUs may require more sophisticated premium features for inventory management
Stores needing a wide range of customization options to satisfy their requirements for an all-inclusive stock tracking system
Retailers seeking offline inventory management tools in case their internet connection is erratic or unreliable

💡For a more in-depth comparison between Shopify POS Lite Vs. POS Pro, check out this blog now.

3. Key feature of Shopify POS inventory management

3.1. Concentrated inventory management

Shopify POS’s concentrated inventory management means that the system is a centralized hub where you can track inventory at various store locations, both online and in brick-and-mortar stores.

Additionally, by allowing sale locations with limited stock to fulfill orders from the central hub, it can help reduce stock at outposts. Regular stocks are transferred to replenish outposts as needed, in time.

3.2. Real-time inventory tracking

Across all channels, including your physical and online stores, and in all locations, this feature guarantees that your stock levels are updated in real time.

More specifically, your system automatically updates the inventory number when a product is sold in your store. This enables you to better manage and monitor your inventory levels by preventing overselling and out-of-stock scenarios.

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3.3. Low stock alerts

In addition, the system can be set to send low-stock notifications automatically when the level of a specific product falls below a predefined threshold.

This feature is an excellent way to remind you to restock products in your store as soon as possible, avoiding situations like being out of stock, disappointing customers, and losing sales.

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3.4. Cost savings

You can avoid overstocking by keeping accurate stock levels. As a result, a significant amount of excess capital will be reduced, eliminating lower storage costs, insurance costs, and the risk of spoilage or obsolescence.

In addition, the feature will help to reduce waste by preventing stockouts and overstocking. That allows you to significantly reduce waste costs due to spoilage, damage, or markdowns.

3.5. Detailed Reporting

Along with providing useful reports on inventory levels, sales trends, and low-stock items, Shopify POS inventory management enables you to monitor your stock levels in real time across all selling channels.

These insights can help you make better decisions and management plans in the future, as well as target the right customers with your store’s late-season promotions.

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4. How can you use Shopify POS to manage inventory effectively?

If you are already interested in this Shopify POS inventory management feature but do not know where to start, follow our instructions below to start using the feature for your store right away.

4.1. Product setup

Step 1: Adding detailed information about your products (descriptions, images, variants, etc.) to your Shopify admin.
Step 2: Do not forget to enable inventory tracking by selecting “Track inventory” and entering the initial quantity of these products.

4.2. Barcode scanning integration

Step 1: Connect a barcode scanner to your Shopify POS and scan it at each checkout.
Step 2: Enjoy while your process is ultimately speeding up and help you accurately and effectively track your stock levels.

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4.3. Low stock alerts

Step 1: Specify a threshold for every product so that the system will alert you if the stock level drops below the predetermined level.
Step 2: You can use these alerts to reorder stock.

4.4. Inventory report generation

Step 1: Do not forget to access Shopify POS reports such as stock reports, sales reports, and inventory value reports
Step 2: Also don’t forget to track useful system analysis, such as trends and product performance, to make informed purchasing, stocking, and allocation decisions.

4.5. Inventory adjustments streamline

Step 1: When a product is returned or exchanged at your store, or when you transfer stocks across your multi-location stores, use the Shopify POS inventory management to update
Step 2: Adjust the number of stock at every location, to accurately keep track of each of the product variations.

5. Closing Thoughts

Shopify POS inventory management helps you run and manage your store on omnichannel more effectively. We hope that our blog today has provided every piece of information you need to know.

If you find it helpful, don’t forget to save and share it with anyone who has the same interest. Also, follow us at eComstart.io to stay up-to-date with our series on e-commerce and Shopify POS system reviews.

How can I optimize inventory receiving in my Shopify store?

To optimize Shopify inventory receiving, establish clear procedures, utilize technology like barcode scanners, designate a designated receiving area, conduct regular audits, collaborate with suppliers, train staff, speed up returns, and continuously evaluate and enhance your process. This will improve accuracy, reduce errors, and save time and money in inventory management.

Which Shopify POS plan offers the best inventory management features?

For inventory management, Shopify POS Pro offers the most sophisticated tools. Thanks to its advanced features, which include multi-location inventory tracking, staff permissions, and thorough reporting, businesses can manage inventory more effectively across a range of sales channels.

How do I receive inventory and update my Shopify POS system?

You can check the shipment, confirm the accuracy of the order, and precisely count the items.
Navigate to the “Products” section in Shopify POS > click on each item > change the quantity in the “Inventory” tab > save your modifications.
Simplify the process by using barcode scanners and taking into account third-party apps. Maintain a regular reconciliation between Shopify POS records and physical inventory.

How can I ensure inventory accuracy in my Shopify POS system?

To ensure inventory accuracy in Shopify POS, you can count physical inventory on a regular basis, use barcode scanners, set up low stock alerts, reconcile physical inventory with system records, reduce manual adjustments, train employees on proper inventory handling techniques, and integrate with third-party inventory management apps for more advanced features.

What are some common Shopify POS inventory management mistakes to avoid?

Inaccurate data entry, failing to reconcile physical inventory with system records, disregarding low stock alerts, inadequately training staff on proper inventory handling, failing to update inventory after returns or exchanges, not using barcode scanners, and neglecting to regularly review and adjust inventory levels based on sales trends are a few common Shopify POS inventory management errors to avoid.

Finn Nguyen

Finn Nguyen is an eCommerce Expert specializing in Shopify, with a passion for guiding new business owners. With over 5 years of experience in the eCommerce industry, Finn has helped many new business owners from launching their first online store to achieving thriving sales.

See his LinkedIn here