how does shopify track online inventory

tell me if this sounds familiar you have,way too much inventory and you don't,know what to do with it or how about a,customer places an order and you don't,have those items in stock so if you're,an e-commerce entrepreneur and you're,dealing with problems like these,that's because you need to improve your,inventory management so you've come to,the right place in today's video we're,going to be talking about what inventory,management is and how to make it,efficient so that you can save yourself,money,time and logistical headaches in the,future,okay so first of all,what is inventory management so to put,it simply inventory management is how,you organize and how you manage your,stock,so your goal with inventory management,is to strike a perfect balance you want,to minimize the cost of holding,inventory,but you still want to have enough so,that you're getting your product into,customers hands as quickly as possible,and finding that sweet spot is going to,be at the heart of every successful,business,so why is proper inventory management,important okay think of it this way,inventory is product that you've already,paid for with cash,and you're gonna sell it for cash,but while it's sitting in your warehouse,it's definitely not cash,money spent on inventory is money that,is not spent on growth,so that being said how does poor,inventory management actually affect,your business,well if you don't have enough inventory,you could be losing out on potential,sales,your days might be filled with making,panicky phone calls to your suppliers or,making special trips to the store but,then on the other hand if you have too,much inventory you might be holding on,to products that are going to go bad or,maybe they're going to go out of style,before you could even sell them so,especially if you are the only one,that's running your company,you want to make sure that you are,focusing your efforts on growing your,company,not putting out fires because of poor,inventory management,so here's how you can start making your,processes more,efficient tip number one use shopify so,you're going to want to start by signing,up for shopify and you guys already know,that i had to make this number one,because if you run your business with,shopify inventory management is already,built in shopify helps remove that human,error as much as possible and with,inventory tracking on shopify all you,really have to do is input how much,product you have and then shopify is,going to do the rest automatically for,you,so if you sell one product it will,subtract that or if you get a return or,you get a shipment incoming it's going,to add that for you it's nice because,the inventory tracking that comes built,in,will help you to avoid selling products,that you don't have or it will let you,know when it's time to order more so,whether you're just starting out or,maybe you're already an established,business the inventory tracking that,comes with shopify makes processes so,much more streamlined so much easier and,i'm not just saying this i truly believe,it when my friends ask or my clients ask,what they should do i always say shopify,um so if you do want a free 14 day trial,with shopify,feel free to hit the link in the,description box and outside of just,inventory management shopify is the,leading tool for selling online so i,will be sure to leave a link for you,guys in the description box for that,free trial,tip number two is to set par levels to,make inventory management easier you're,going to want to set up par levels for,each of your products,power levels are the minimum amount of,product that you should be having on,hand at all times so when your inventory,dips below that number that's how you,know it's time to order more,so if possible you're going to want to,order the minimum quantity that will get,you back above par,so to determine your par levels for each,product,take into account how quickly the item,sells and how long it would take to get,it back in stock,i'll leave a little formula for you up,here on the screen now i feel like this,is a little bit intense might be a,little bit daunting but,trust me if you do do this research up,front this is going to help you order in,the future,and you're not going to be second,guessing how much inventory you should,order,but one thing that i do want to mention,is that over time variables might change,so you want to make sure that you are,checking up on your power levels during,different seasons just to see that they,are still accurate and don't be afraid,to adjust your par levels up or down as,you evolve as a business,tip number three is fifo so the next,step is the fifo method and this kind of,sounds like a cute puppy but actually it,stands for first in first out so what,this means is the first inventory that,you get will be the first inventory that,is sold so the oldest products are going,to be going first now this is especially,important if you're selling perishable,inventory so if you sell food or,skincare you're definitely going to want,to keep track of this so that you're,selling your inventory before it goes,bad even if you're not selling,perishable items this is still important,to follow because over time products,become obsolete maybe boxes get worn out,things go out of style that kind of a,thing so if you're working with a,fulfillment center you can definitely,just double check that they do do this,but if you're managing your inventory at,home stay in your living room all you,have to do is put the oldest products in,at the front and the newest at the back,so that you're always sure that you're,reaching for that old product as you're,packing your orders,tip number four,manage your relationship with your,supplier,having a healthy relationship with your,supplier is going to be beneficial for,you so for example let's say you have a,too much inventory and you want to,return some of that stock or maybe you,need them to speed up an order they're,going to be more likely to work with you,if you are in good standing,and having a good relationship is about,more than just being friendly it's about,having good communication and it's about,being proactive as well so for example,if you let them know in advance that,you'll need more inventory they can,preemptively ramp up production which,makes their workday smoother and your,relationship stronger,tip number five is prepare a contingency,plan,so when it comes to inventory management,it's not about if an issue is going to,arise it's about when,so you want to prepare a contingency,plan so for example when i was working,with an e-commerce jewelry company i ran,this email campaign and it did a lot,better than we had anticipated so we,oversold our necklaces,it was definitely a hassle in the moment,but it helped us develop a contingency,plan that included not allowing the,option for customers to buy when things,were out of stock on shopify,but instead we would allow them to sign,up for an email notification when it was,back in stock other classic examples of,inventory management road bumps include,well number one this is super common not,having enough cash flow and not being,able to pay for products that you,desperately need here's another one you,might also make a miscalculation in,inventory and have too much or too,little stock,and then also your manufacturer could,run out of your product and you have,sales orders to fill so these types of,hiccups are,happening all the time so you want to,make sure that you are looking at your,own supply chain and thinking about some,of those things that could potentially,go wrong and brainstorming ahead of time,all right favorite part of the video it,is a comment time so i'm gonna go,through some viewer comments and i'm,gonna answer a few of you,so in a recent video on how to research,manufacturers,we had a comment here from j.s keller,and they asked,if i want to hire someone to do this,process for me,what is their job title and who would i,hire,so basically they want to know who they,would hire if they wanted someone to,communicate with manufacturers and come,up with supply chain solutions so this,is a great question and you would hire,someone that is an inventory manager and,if you're looking to hire someone you,can find someone on upwork if you're,looking for a freelancer or you can hire,an employee on linkedin,teresa rose says,stocks are good,but i swapped and invested in forex,bitcoin and other cryptocurrency,i have been making good profits,24 likes 21 replies i think i'm in the,wrong line of work and acos ua said,makes me more confident in starting my,shopify store thank you i love reading,comments like this because,that is what this channel is all about,we want to make sure that you guys are,feeling well equipped and ready to start,your own e-commerce journeys your own,businesses boss up and really feel in,control of your passions and your,business journeys so thank you guys for,leaving your comments so nice to read,make sure that um you are leaving,comments if you want to see your,questions featured in the next video and,also leave me something funny because,that's always fun thank you guys so much,for watching hopefully you found this,video helpful,um if you do like content like this like,if you are the type of person that wants,simple and actionable tips like step by,step this is how to start and run and,grow your business make sure that you,are hitting that subscribe button so,that you're not missing out on any,future videos don't forget to hit that,notification bell because we are,dropping a video every week,other than that thank you guys so much,for watching my name is michelle and i,will see you in the next one bye

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