Effective store management, especially in a system as complex as Magento, is quite demanding. It covers many tasks on various levels, including order processing, marketing, sales, etc. Yet, inventory is perhaps the most important thing you have to consider. Why? Because it takes the longest to manage.
It’s crucial to monitor the products you sell, update the pricing and change stock status in bulk. Fortunately, you can always rely on Magento inventory management tools and use their extensive options.
So, you've landed on the right page. Today, you'll learn more about how Magento manages inventory and find useful tips on how to enhance your Magento inventory system.
Understanding of Magento Inventory Management
Inventory management system Magento is a flexible solution that helps business owners avoid overselling, stockouts, delayed shipping, and consequently unsatisfied customers.
Let's check what options you have to manage inventory in Magento better.
Single-Source vs Multi-Source Inventory
There are two inventory approaches in Magento that you can use to fulfil your business needs: Single-Source Inventory (SSI) and Multi-Source Inventory (MSI).
Understanding the difference between these two types of Magento inventory management directly affects how you manage stock in your store.
Single-source inventory in Magento is a "traditional" inventory system. It's used if you manage product stock from a single location or warehouse. This mode is ideal for small or medium-sized businesses that don't need to track inventory across different places.
Setting up a single-source inventory is simple. It requires minimal configuration since all the orders are shipped from the same spot, and the stock levels are easy to control.
However, if you operate more than one inventory source, you might need a different approach — the Magento multi-source inventory.
Magento MSI allows you to manage multiple sources, organize them into stocks, as well as assign different product quantities to different sources.
Simple product inventory (basic products)
A simple product in Magento is the most basic product type. It has a simple SKU (Stock Keeping Units) and doesn't come with different variations, unlike configurable products.
Managing inventory for a simple product is exactly that — simple. Each simple product has a unique quantity which you can easily update in bulk or for separate products. Simple product inventory offers a smooth workflow without any unexpected delays.
Configurable product inventory (products with options)
Magento 2 configurable product is a parent product that consists of multiple simple products. It allows customers to choose from different variations, such as colour, size, material, etc.
Configurable products don't have their own inventory. Instead, each colour or size (each variation) is a simple product. So, inventory is tracked individually for each of these simple products.
If one of the variations is out of stock, a customer won't be able to select it on the frontend.
Bundle product inventory (custom sets or kits)
A bundle products are made of several simple products that a customer can choose and configure before purchasing.
The bundle doesn't have inventory either. The bundle inventory is managed based on the stock of its child products (simple products).
Therefore, inventory management tools Magento count the availability of the bundle based on the stock status of the selected options.
Top Benefits of Magento 2 Inventory Management
In Magento, inventory management is more than just counting the number of products. It's a comprehensive system to track stock levels, manage multiple warehouses, and control the availability of items in stock.
Magento offers a range of inventory management benefits. Each helps you enhance operational efficiency, improve customer satisfaction, and run a successful store:
- Real-time stock updates: Magento updates inventory right after the order is placed or when a refund or return is in process. It prevents selling items which are already out of stock.
- Multi-warehouse support: Magento automatically chooses the best source for order fulfilment, depending on the shipping location and the quantity of available products.
- Pre-order opportunities: Magento allows customers to buy a certain product even if it hasn't been released yet to increase interest in the product.
- Backorder option: Magento lets customers place an order for an item that is currently out of stock through backorders. The item will then be shipped as soon as it becomes available.
- Dropshipping support: Magento easily integrates with dropshipping services, allowing you to sell products you don't physically keep in stock. In this case, the supplier sends the item directly to the customer.
Magento 2 Inventory Management Settings
Regardless of the inventory approach you use, single-source or multi-source, there are general and advanced Magento inventory settings.
By using the "In Stock" and "Out of Stock" labels, you establish indirect communication with your customers. You save them from the unnecessary hassle when the item turns out to be unavailable right before they're ready to purchase.
Thus, to apply the general Magento stock settings navigate to Stores > Configuration > Catalog > Inventory and set up each section accordingly.
Stock options
The settings filled out in the Stock Options section are applied to your entire catalogue. Besides, you can specify if the stock status is visible on the storefront.
Then, you can set the general behaviour of the statuses and determine whether the out-of-stock products are displayed at all.
Below is a short overview of the options Magento offers here:
- Decrease Stock When Order is Placed: choose Yes, if you want the stock to reduce right after the order is placed. Set No if you want the stock to reduce after an invoicing or shipping stage. Leave this option enabled to prevent overselling.
- Set Items' Status to be In Stock When Order is Cancelled: choose Yes to automatically mark an item In Stock after an order is cancelled. Set No, if you want to check the returned item and update the information manually.
- Display Out of Stock Products: select Yes to show the Out of Stock items on the storefront. In this case, customers see that the product exists but is not available at the moment. Note that keeping product pages "live" is better for product page SEO than disabling a page as soon as the product is out of stock.
- Only X left Threshold: set this option to show your customers the number of items left when the quantity drops below a specific level. This helps to create urgency to buy rather than postpone the purchase.
- Display Products Availability in Stock on Storefront: choose Yes to show In Stock or Out of Stock status on the product page to inform customers whether they can purchase the product right away.
- Enable Inventory Check On Cart Load: enable this option to make Magento check if the products in the cart are still in stock every time the cart is opened.
- Synchronize with Catalog: choose Yes if you want the inventory to update automatically when you remove or update products in the catalog. However, select No if you need to manage the changes manually to have full control of your inventory.
Product stock options
Together with the Stock Options, you can configure the Product Stock Options for separate items.
These open new possibilities to manage stock more effectively. For example, you can set the minimum quantity of items in the shopping cart and even add different settings for different customer groups.
Here's a quick overview of product stock management options:
- Manage Stock: enable this option to determine if stock levels need to be managed manually or automatically.
- Backorders: choose a corresponding option to determine if customers will be able to buy out-of-stock products. In this case, your inventory will go negative.
- Maximum Qty Allowed in Shopping Cart: limit the number of items a customer can add to the shopping cart per order. This ensures that customers won't order an unrealistic amount that you can't provide.
- Out-of-Stock Threshold: set the quantity of a product after reaching which the item will be marked as "Out of Stock".
- Minimum Qty Allowed in Shopping Cart: specify the number of products people from different customer groups have to purchase for bulk purchases and promotions.
- Notify for Quantity Below: specify the stock level at which the Magento out of stock notification should be sent.
- Enable Qty Increments: this option is useful when you sell in bulk. It allows you to set a fixed quantity step for a certain product. So, if you set the increment to 3, customers will be able to add products to their cart in multiples of 3 — 3, 6, 9, and so on.
- Automatically Return Credit Memo Item to Stock: enable this option to automatically move returned items (refund or exchange process) to stock. Choose No to manually make it "In Stock" again.
Depending on your sales strategy, you might need to enable quantity increments, the out-of-stock threshold, or some other options from this section. Tweak the settings just the way you need.
Advanced inventory options
After the global stock settings, you can go even further and configure the advanced inventory. This allows you to apply the extended inventory settings for each product in your catalogue individually, giving you more flexibility.
To access the config, go to Catalog > Products, choose the item you want to set up the advanced inventory for and press the Advanced Inventory button under the Quantity field. Then, go on and fill out the corresponding fields to adjust your needs.
What's important, you can either exclude or include stock management here. So you'll have to configure the short or long form respectively.
Magento Inventory Tips
In the process of managing your inventory, pay attention to customers and their experience. The options we've just described are just the beginning. To increase customer engagement and convert them into active shoppers, you should follow a few tips.
Let's take a look at the options you have.
Configure back-in-stock notifications
One of the features you can use is the back-in-stock notifications. You configure these product alerts in the backend. Then the corresponding message is displayed on the product page of the out-of-stock item.
So, your customers can subscribe to the notification and get updated as soon as a corresponding product is back in stock.
It's a great solution to increase loyalty. It allows customers to buy your product instead of looking for similar items elsewhere.
Enable backorders
Magento 2 backorders may turn out to be even more effective. While the back-in-stock notifications only update customers on the availability of the product, backorders allow them to place orders for items currently out of stock.
Correspondingly, the back-ordered products are shipped as soon as they are restocked.
Depending on the result you want to achieve, enable backorders either for the entire catalogue or specific items only.
Set up low-stock notifications
To avoid the out-of-stock situations altogether, configure the low-stock notifications. These email notifications are sent to the admins when the quantity of products reaches a specified threshold.
You can send notifications based on the quantity or the salable quantity. Either way, you receive valuable insights into the product stock to restock on time.
Use bulk editors to manage stock
Now, everyone knows that getting notified about low stock levels and restocking doesn't usually take as much time as editing products after. Regardless of the stock levels, you have to go to each product and edit the quantity once products are back in stock.
So, if you don't want to spend hours on something that basic, use the product editor to edit product quantity in bulk.
Best Practices for Magento Inventory Management
Finally, the Magento inventory management doesn't end in the config section. To save your time and prevent stock problems, use have to continuously follow the best practices.
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Use multi-source inventory: if you have multiple warehouses, use MSI as this reduces shipping time and costs.
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Audit stock quantities regularly: schedule regular stock checks to compare system data with actual stock levels, as human error can happen more often than you think.
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Set realistic low stock thresholds: set different thresholds depending on product demand, as it will give you time to reorder popular items before they are out of stock.
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Train staff on source and stock management: informed staff make fewer mistakes, notice inventory issues, and assist customers more effectively.
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Automate repetitive tasks: speed up order processing and reduce the time your team spends on Magento inventory reports and tasks by automating their routine.
Effective inventory management for Magento is key to easier order processing and improved customer experience. And since Magento provides multiple stock options, you should make the most of them to fulfil your business needs.
However, don't forget that managing stock levels and editing quantities is just the tip of the iceberg.
You have to update a lot of product data to prepare for sales, different campaigns and just keep your product pages updated. To do that fast and hassle-free, you need a reliable .
FAQs
There are three ways to check the inventory in Magento:
1. Check the product inventory details: Go to Catalog > Products. Choose the product you need. Scroll to see the quantity in stock, stock status, and source level inventory (if you are using MSI).
2. Check the inventory by source: Go to Stores > Inventory > Sources. Choose a source and review the products and their available quantities.
3. Use stock reports: go to Reports > Products > Low Stock to see the items that need to be restocked.
