Are you wondering if you need to buy any sort of inventory for Shopify? In this article, you will find answers to all your questions!
Do You Need Inventory For Shopify? Does Shopify Hold Items?
Shopify does not offer inventory to merchants from where they can ship products to customers.
If you are selling physical goods, you must own an inventory for your online store or source it from somewhere else.
If you can find a supplier who supports dropshipping, you do not need to invest in inventory. The suppliers will drop ship your products to customers on behalf of your online store and provide you with their inventory records.
On the other hand, if your online store at Shopify deals with digital products like AntiVirus protection or subscriptions, you do not need an inventory. Since these products can be delivered via mail or any other digital method, and they do not need storage or tracking.
How does inventory work for Shopify? Shopify’s Inventory Management System
Inventory Management System or IMS in Shopify is a programmed software that offers merchants their inventory orders, product tracking IDs, and fulfillment with customers and suppliers.
It allows merchants to track products during delivery and even their products from their inventory along the supply chain. Luckily, Shopify offers merchants an in-built inventory management system.
With the built-in inventory management system, beginner merchants can easily organize their products along the streamlining and track products effectively. However, as their brand grows, with more data, merchants need to be more vigilant with their stores.
Hence they will have to take the help of inventory management applications in Shopify, which lets users manage inventory at high scales. When searching for inventory management systems, you must check for the given components in them.
Feature 1: Order Management
The IMS must ensure that your stocks are efficient in meeting customer demands. When the stock runs low, the IMS should notify the admin about the stock, and ask them to refill the inventory, to meet the demands.
Feature 2: Multi-Channel Sales Alignment
The IMS or Inventory Management System should synchronize your multiple sales channels. With this feature, you do not need to worry about your stock locations.
Feature 3: Share Reports and Analytics
The application must allow the features in IMS to track the stock. It should also send the reports to the admin, and the analytical tools of the IMS should send reports on the sales volume.
These features help the merchant understand which product they must focus on. In addition, the IMS must also be capable of forecasting the sales volume of products at a specific time frame.
There are many Inventory Management Applications that you can find in Shopify App Store. Check some of the best IMS applications provided by Shopify.
How Does Shopify Keep Track Of Inventory?
Shopify has three standards through which they keep track of inventory. It’s based on the Shopify subscription plan that you have:
- Basic Shopify Plan ($29 per month) – With this plan, Shopify lets you transfer your stocks between four different locations all around the globe, and you can independently manage your stock levels.
- Standard Shopify Plan ($70 per month) – Besides including the inventory features of the basic Shopify plan, this plan also includes ABC analysis.
- Advanced Shopify Plan ($299 per month) – With this plan, Shopify users can manage, transfer and track their stocks between eight different locations.
These are built-in and perfectly sync up on your online store. Again as mentioned above, these are for small businesses, if you have a robust enterprise, you will need more advanced forms of inventory management systems.
Do You Pay For The Products You Sell On Shopify?
No, Shopify does not charge merchants any extra fee for selling products from their eCommerce platforms. You only need to pay the monthly subscription price to enable selling options for your store.
You can display and sell unlimited products from your online store on Shopify. The only condition that Shopify has is to have one of its monthly subscription plans.
There are three plans that Shopify offers to sellers – basic, standard, and advanced. And with any one of these plans, you can sell your products for free. However, Shopify does charge some percentage on each transaction. (Check out Shopify Fee Calculator)
The transaction fees are charged higher if any third-party payment gateways are used other than Shopify Payments. However, Shopify charges on each transaction made.
And they can be higher depending on the transaction area. Domestic transactions have fewer processing fees than international transactions.
Do You Need Your Own Products To Sell On Shopify?
Selling your own products on Shopify is not necessarily compulsory. You can always find dropshipping suppliers who directly provide you with their products.
You can act as the third-party dealer between your supplier and customers. The suppliers will directly deliver the ordered products to your customer’s address.
In return, they will share some percentages of their profits with you.
Selling your own physical goods on Shopify means dealing with the trouble of owning an inventory or working with delivery partners. This can result in extra expenses.
If you have to spend in inventory, make contacts with couriers and organize your customer data. This can be a lot of headaches, and it will consume more manpower and money.
Related: How Much Inventory Should I Start with an Online Store?
So the optimal choice is to re-sell products from other suppliers, using different shipping methods.
Do You Have To Buy The Products For Dropshipping?
If you use the drop shipping method of selling, you do not need to pre-purchase products. Buy the products from your supplier only when you have sold the products to your customer.
Since you do not maintain the inventory, purchasing unsold products can save resources. You can handle shipments, good stocks, and, most importantly, manage the warehouse or inventory with drop shipping.
In addition, since you are not pre-purchasing your goods, you can display a wide array of trending goods for sale without owning those products. Notify your suppliers of the orders, and they will do the rest.
Drop shipping has made online business easy. With no pressure to stock goods, merchants can sell various products to customers, given that the suppliers have stocked the goods.
Final Thoughts
Owning inventory is important if you are selling your own goods. But if you are dropshipping you don’t need inventory.
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FAQs
How Many Products Can Shopify Hold?
Shopify doesn’t physically hold any amount of products. However, if you are referring to how many products you can assign to their system, it’s unlimited. You can assign as many products as you want.
Does Shopify Have Its Own Inventory?
Shopify does not have an inventory that it physically holds. It has an inventory management where you can add products, remove products, add variants, and much more.
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