Best Practices in Using Shopify to Manage Multi-Location Inventory

One Shopify account, many warehouses.

Until recently, many Shopify users weren’t able to see location-specific stock levels, which made accurate inventory tracking and control cumbersome.

Until now.

Launched in the fall of 2018, Shopify merchants can now manage inventory from multiple locations at once. Merchants are now able to control their inventory and optimize inventory levels.

Why use multiple locations in inventory management?

Because there are so many different sales channels in today’s marketplace! The locations can be retail stores, warehouses, pop-ups, drop-shippers, or any other place where inventory is stocked and managed. Shopify’s new functionality allows you to sell products, ship or fulfill orders, and stock inventory for each location. You will now have better visibility across your inventory and into your business.

Now you can know which locations are over- and understocked on particular items, if you must transfer items from one location to another, or if you need to order from your supplier and ship inventory to a specific location.

How many locations can Shopify manage?

That depends on which plan you have with Shopify.

Shopify Plus – 20 (Contact Shopify if you need more locations.)

Advanced Shopify – 8

Shopify – 5

Basic Shopify – 4

Shopify Lite – 3

Shopify considers other apps which fill orders or stock merchandise to be locations. However, they don’t count towards the set limits. Adding one of these apps to your store automatically adds it as a location.

How Shopify Helps Manage Multi-Location Inventory

Set-Up and Prioritize

Setting up warehouse and fulfillment locations in Shopify is simple to do. And the drag-and-drop priority feature couldn’t make it any easier to specify where you want your merchandise coming from:

1. In your Shopify dashboard, go to Settings > Locations.

2. Click ‘Add location’.

3. Enter the name and address of each location. You must enter the full address of the warehouse if you are using shipping rates in Shopify.

4. Check ‘Fulfill online orders from this location’ if you want this inventory to be available for online purchases.

5. Click ‘Save’.

After entering a location, it is added to your fulfillment priority list as the last location. If you want to change that, click ‘Edit fulfillment priority’. It has a drag-and-drop functionality that allows you to change the order.

In this example, drag the Texas warehouse to the top of the list if that is the primary location. If the Texas warehouse is sold out, fulfillment priority will bump to the Nebraska location, and so on down the line.

This is true for all active locations. Note that deactivated locations or apps cannot be set as the shipping origin.

It may be that you change the shipping origin to a location where a carrier isn’t supported. If that is the case, the rates for that carrier are hidden at checkout. For example, if the shipping origin is set to a location in the United States, Canadian postal rates are not shown at checkout.

Assign Values

When Shopify is your master of inventory, you can change the quantity of inventory in any given location.

1. Go to Products and click on the product you want to change.

2. In the Inventory section, ensure that Shopify tracks this product’s quantity is selected in the Inventory policy list.

3. Click on Edit locations.

4. Check the locations that have the product, and leave the locations without the product unchecked.

5. Click Save.

Change Inventory Quantities

Expecting a new shipment from your supplier or just added a new location to your Shopify account? You can easily change your inventory quantities for each location.

Let’s say this is your current set-up in Shopify:

You have gone through the process to add a warehouse in New Mexico, and you are redistributing your inventory across three warehouses:

1. Go to and select the desired product or variant.

2. In the Inventory section, click the quantity for a location in the Available column.

3. You can adjust or set the quantity of your inventory with positive or negative numbers.

4. Click Save.

Sales Forecasting

Now that you can see stock by location, how do you optimize inventory levels? What factors do you need to consider?

Read more about how to calculate the demand forecast for your products.

Forecast by location

It is important to remember geographic areas have their own personality when demand forecasting. Keep that in mind as you are setting up your distribution. For example, winter boots will sell well in the Northeast and Midwest parts of the United States, but may not sell as well on the Pacific Coast. Shorts will be a seasonal item in the Midwest, but will sell year-round in California and Florida.

Forecast by sales channel

You may see a similar effect when looking at forecasts by sales channels. What customers buy in person at your brick and mortar location can be different than what they buy online. Be sure to look at demand by sales channel to see differences in what you will need to stock.

Greater efficiency

When ordering from overseas suppliers, you may want to look at the total demand for your store. Then when your inventory arrives from your supplier, distribute it domestically to your various locations. It’s worth considering different shipping scenarios to see what will save you money while optimally stocking each location.

What to analyze with demand forecast by location

1. Understock – where do you need more stock to meet demand? Can you transfer stock from one location to another to meet customer demand?

2. Overstock – where do you have too much inventory? Is there another location with a higher sales velocity for those items? It is not worth your time or money to have exactly the same inventory in every location. This is something else to consider when you are looking at your overall merchandise distribution.

3. Trends – what products or categories of products sell well at each location? Do you see different amounts of increase or decreases in demand? Do seasonal sales affect one location in a different way than other locations?

Summary

Shopify’s new multilocation system allows you to easily create new distribution points, maintain control of inventory, optimize inventory levels, and work on sales demand from one screen. Your type of Shopify account will dictate how many locations you can have. Prioritization and inventory distribution are available with a few clicks of the mouse. Proper sales forecasting will also allow you to have the correct inventory levels in the right place for quick consumer access.