Prevent Negative Inventory on Shopify With These Simple Fixes

Effective inventory management is crucial to selling on your Shopify store. Discover causes and ways of preventing negative Shopify inventory in this article.
By 

Kelli Harris

 on August 31, 2022. 
Reviewed by 

Michelle Meyer

Effective inventory management and optimization strategies are crucial components of selling products on a Shopify store. Mismanaging your inventory can affect your bottom line because you may order too much or too little stock resulting in missed sales opportunities or losing customers.

In this article, we'll discuss some causes and ways of preventing negative Shopify inventory.

Causes of Negative Inventory on Shopify

Negative inventory on Shopify is a common issue that occurs when inventory levels fall below zero. If it goes unmonitored, it can cause problems for your company's operations.

Negative inventory can occur due to:

Manufacturing Time

Negative inventory can occur when a customer orders a product that isn't in stock, but you mark the order as shipped because you know production will be done soon. This problem is arguably the simplest to address since you can alter inventories after manufacturing is complete.

Manufacturing Volume

A number of factors need to be considered during manufacturing such as byproducts, scrap amounts, production statistics, and batch tracking. Making too few or too many products due to an incorrect understanding of your manufacturing orders can be detrimental to your business.

Inventory at Multiple Locations

This may happen if goods are sent to the incorrect warehouse or if a sale is logged from the wrong shop. Therefore, inventory tracking is vital because if the stock transfer is not properly saved, it can seem that Shop A is short 100 goods while Shop B has 100 more than it requires.

Item-Level Negative Stock

In order to reflect the most up-to-date stock levels, businesses sometimes resort to a technique known as "backflushing", which is creating and fulfilling a manufacturing order after a batch production has concluded. Alternatively, a negative stock level might show up for an item if it's meant to be manufactured on demand.

Simple Fixes for Negative Inventory on Shopify

In your inventory management system reports, find products or supplies with zero stock and examine recent transactions to help give you context on what caused negative inventory and what can be implemented to prevent it from happening again.

Time

When making inventory adjustments, be careful not to overestimate the total, especially if products were listed as shipped before manufacture was complete.

Location

Stock might be at the correct location even if you entered the wrong values when recording a stock transfer. Therefore, the inventory amount must be adjusted correctly.

Item-Level Negative Stock

The problem could sit with your manufacturing process, which would suggest a significant issue. As you are producing your products or materials, you need to conduct an e-commerce inventory analysis to understand why negative stock is coming in.

Conclusion

There are various e-commerce inventory management methods to implement for a Shopify store and you can employ the method that will be best for your store and products to prevent inventory mismanagement.

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