Shopify integration

Inventory Planner and Shopify

Monica avatar
Written by Monica
Updated over a week ago

You can enhance your Shopify store further by integrating it with Inventory Planner. This article discusses how to perform the integration and details how the connection works.

Integrating Shopify and Inventory Planner

To integrate Shopify and Inventory Planner, log into your Shopify store, then go to the app store and install Inventory Planner.

After you've connected it to your store, you can log into Inventory Planner by clicking its title in the app section of your Shopify store.

The first time you sync your data, Inventory Planner will import your sales history and product information. After that, your store data will sync daily with Inventory Planner.

Note: You can connect multiple Shopify stores to a single Inventory Planner account.

Using Inventory Planner with Shopify

Viewing replenishment and ordering recommendations

Inventory Planner will provide a sales forecast based on your Shopify store's sales history, and offer recommendations for which products to purchase in order to meet customer demand.

Click on "Replenishment" to view the recommendations. Inventory Planner pulls data from your points of sale or warehouse locations and displays each location separately.

Calculating the forecast

Inventory Planner uses your Shopify store’s sales history to compute the sales velocity, which is the number of units sold divided by days in stock. Sales velocity is a more useful measurement than average sales over the past 30 days because it only takes into account the time your inventory is actually in stock. Omitting days when inventory was out of stock helps avoid underestimating future demand.

Sales velocity helps you determine how many units of a product your customers will buy over a given period. When you know that, you can factor in lead time and days of stock to determine the appropriate amounts to order.

This sales velocity figure is the core of your store’s sales forecasting, which also takes recent sales trends into consideration. If an item is increasing in popularity month over month, the forecast will pick up on this increased popularity and you will see the trend line continue. If demand is fluctuating from month to month, then there is no trend line to factor into the forecast.

With seasonal products, Inventory Planner forgoes looking at recent trends in favor of reflecting what happened at the same time the previous years. For example, if you are looking ahead to November 2019, Inventory Planner will look back to November 2018 and November 2017, taking the demand and increase from 2017 to 2018 into consideration and applying it to November of 2019, therefore including a year-over-year increase in this forecast.

Calculating replenishment recommendations

With the forecasted demand figured out, Inventory Planner will take your current stock level and any outstanding orders into consideration to develop a replenishment recommendation. This replenishment recommendation tells you which items to purchase. It's based on your lead time, and assumes you’ll continue selling the items during your lead time so that when the order arrives, it will cover your full days of stock.

The lead time and days of stock are the most important pieces of information to update when you start with Inventory Planner. Lead time starts when you place your purchase order with a supplier and it ends when you receive items into inventory. That might be 14 days if you’re ordering from a domestic supplier, or perhaps 90 days if you’re ordering from overseas. 

When considering days of stock, think about your ideal stock cover. You want your supply of a product to last until a new shipment of that product arrives at your warehouse. Perhaps that’s 30 days, which also would be reflected in your order frequency. In that case, your every-30-days order frequency is your days of stock.

Creating purchase orders

Once Inventory Planner has created a replenishment recommendation, you can select individual items in order to create your purchase order. At the bottom of the page, you can click the button to create a new purchase order.

In the quantity column, you’ll find your replenishment recommendations from the last page automatically populated. Any cost prices that you've entered in Shopify will automatically sync to Inventory Planner so that you don't need to reenter this information. You can choose your supplier as well as your destination location or warehouse.

Once you're happy with the purchase order, click save and to create it. From here, you can send the purchase order to your supplier in several different formats. You can customize the email that your supplier will receive, or you can download this in a variety of formats if you prefer.

Note: At this time, purchase orders from Inventory Planner cannot be synced to Shopify's "Transfer" section due to API limitations. Once the Shopify API for transfers is available, Inventory Planner will add this functionality.

Receiving products on a purchase order

Inventory Planner also can be used to receive items into your inventory after they’ve arrived. Once you've received the items, you can increase your stock in your Shopify store.

Only increase your stock in Shopify if you use Shopify as your inventory master system. If you use a different system - for example, an inventory management system or a warehouse management system that handles and coordinates your stock levels - then you will not want to push stock increases to Shopify.

After clicking on “increase the stock level in Shopify,” you’ll see how many units you have received and what the new stock level is after those items are added. If you have previously received items on this purchase order, you will be able to see that in the final column. Once you've confirmed everything looks correct, click on “update the selected items.” When you go over to Shopify, click on “products” to see the updated count of items in the specified location. 

Identifying overstock

In addition to seeing which items need to be purchased, Inventory Planner can help identify which items are overstocked. Overstocked items sit on your shelves for too long, tying up your cash and taking space better used for other, faster-selling products.

The calculation for the overstock is based on your forecast-calculation settings set back in the replenishment process - specifically, the lead time and days of stock that you set up in your planning period.

Inventory Planner can forecast how many units will be on hand as of the end of a specified planning period. Those are items above your anticipated customer demand, so they can be cleared out. You can consider these items by their retail value, which helps you prioritize which items need to be moved out most quickly, or perhaps tell you if you have a small amount of overstock on an item, which may be a lower priority and thus doesn’t need to be moved out as quickly. 

Additional reporting

There are additional reporting features within an Inventory Planner that can be helpful when looking at what is happening with your suppliers and variants. The Inventory KPIs report is very flexible and can be used for a lot of different purposes. You can consider this report for all locations or just specific locations within your store, as well as view this report in a number of different dimensions down to the SKU level, on the total level for the entire store, by collections tags, which are brought in from Shopify, as well as a number of other dimensions.

You can also specify the time period that the report will cover and compare time periods (e.g. the last 30 days compared to the prior 30 days). Inventory Planner can delineate those time periods, showing how many units you’ve sold in the sales column, so you can see the difference between the two. Starting on a category level gives you a big-picture look at what is happening in your store. At a glance, you can see increases or decreases in sales in your various product categories, a helpful way to get a quick glance at your store’s performance. If you see a surprising decrease in a specific category, you can drill down further to the SKU level to get a more complete picture of what’s causing that decreased demand.

As with other reports within Inventory Planner, you can also customize which metrics are showing. There are more than 125 metrics available. You can pick and choose these and you can reorder them so that it's customized to your exact needs. Inventory Planner also offers a number of filters so you can configure the report in the way that you need to. You can save filters, and you can save these as presets so that it will show automatically when you come to this report.

Shopify vendors

Note that in Shopify, the "Vendor" field on your product page will show as the "Brand" in Inventory Planner. Shopify vendors are visible on the site and are mapped to Inventory Planner brands. Inventory Planner vendors correspond to suppliers and can be created separately. Note that you can add one or more brand (vendors from Shopify) to an Inventory Planner vendor which will associate all current and future variants of the brand with the vendor.

Shopify returns and refunds

When a return is created in Shopify, it can be marked returned without doing a refund. These returns do not show in Inventory Planner and do not contribute to sales metrics (Sales, Returns Units, etc) due to limitations in Shopify's orders API. Such returns also do not decrease the Net Sales metrics in Shopify sales reports.

If a manual refund is created without returning line items, it will not contribute to sales or revenue metrics in Inventory Planner. This is the same in Shopify sales reports - such refunds do not affect sales reports.

If the refund amount is different from the original price, Shopify creates an internal refund adjustment for the difference. These adjustments are not applied in Shopify sales reports - the return always uses the original price. Inventory Planner works the same way: even if you refund less, we still use the original price to match Shopify sales reports.

For an exchange, we recommend explicitly refunding the amount of 0.00 as a workaround to make sure Inventory Planner sees the return for the original order. However, note that if the price of the replacement order is 0.00, the total revenue for the two orders and the return will also be zero in Inventory Planner and Shopify.

Shopify and Inventory Planner reports

You may observe some differences between Shopify and Inventory Planner reports. Here are some things to keep in mind:

  • Net sales in Shopify roughly corresponds to Revenue in Inventory Planner.

  • Gross sales in Shopify roughly corresponds to Gross Revenue in Inventory Planner.

  • Discounts in Shopify are computed using coupons. Discounts in Inventory Planner are computed as (regular price - price) * quantity. They include coupons and other markdowns.

  • Archived items in Shopify will still show in Inventory Planner by default. If you would like these removed from your account, please contact Inventory Planner using the chat in the lower right corner of your screen.

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