What is the main purpose of inventory?

Online buyers expect cheap prices and fast shipping. The objective of holding just the right quantity of inventory is to make sure that customer expectations are met.

What is the difference between inventory and stock?

Basically, the stock is the supply of finished products available for sale, and inventory includes both finished products and elements that create a finished product. In simple words, all stock is inventory, but not all inventory is stock.

What is the easiest way to track inventory in shopify?

If you want to track product inventory with easiest way in shopify, please read the complete guide here .

What is the best way to manage inventory in shopify?

If you want to learn how to manage your inventory, determine your product costs and send purchase orders to your suppliers using konigle then please read the complete guide here .

What is inventory? Meaning, Types and Formula

What is inventory?

As you know, Inventory is a collection of all the items, goods, merchandise, and materials held by a company or business for selling in the market to earn a profit. Inventory is not used the produce things or promote a brand or business.

Its sole purpose is to sell to the customer and earn profit but only for this, it is not called Inventory. Inventory must be part of the business or company.

For eg, a t-shirt shop’s delivery truck is not considered inventory because it is not directly or part of a product but in the vehicle business the delivery truck is a part considered inventory because they are in the business of selling vehicles.

Inventory is a major asset on the balance sheet for almost every company and it's depending on what goods or services your business provides.

As you know, working with a huge amount of inventory is quite complicated and required lots of time but Konigle's Shopify Inventory Management helps you to save time and increase profits.

What are the 4 types of inventory?

There are many different type of inventory but the major type are most follows are:

1. Raw Materials

Materials that are needed to turn your product into a finished product are raw materials inventory. The raw material is pieces of component parts (eg, batteries, boxes, etc.) that are currently not ready or in progress.

2. Work in Progress

Materials that are direct or indirect (eg, phone cover, circuit, etc.)use to create products are work in progress(WIP) Inventory.

3. Finished Goods

This is a finished ready-to-sell product (eg, Mobile phone, Perfume bottle, etc.) that can be sold to wholesalers, retailers, or even end users also.

4. MRO Inventory

It is inventory that is required to assemble, maintain, repair, and operating supplies (eg, folders, printer toner, gloves, etc.) and sell the finished product but is not built into the product itself.

How do I calculate inventory turnover?

This the formula to calculate turnover of the number of times a company sells (inventory).

Average inventory = Beginning Inventory + Ending Inventory / 2

Inventory turnover = Sales + Average Inventory

What are the benefits of inventory in a business?

There are so many benefits that can result from managing inventory properly. Some of them are:

Identify and reorder items you sell
Prevent Dead Stock
Improve Pricing
Reduce out of stocks
Improved Warehouse Organization
Improved Accuracy of Inventory Orders
Save Time and Money
Improved Customer Retention

Frequently asked questions

: Online buyers expect cheap prices and fast shipping. The objective of holding just the right quantity of inventory is to make sure that customer expectations are met.
: Basically, the stock is the supply of finished products available for sale, and inventory includes both finished products and elements that create a finished product. In simple words, all stock is inventory, but not all inventory is stock.
: If you want to track product inventory with easiest way in shopify, please read the complete guide here.
: If you want to learn how to manage your inventory, determine your product costs and send purchase orders to your suppliers using konigle then please read the complete guide here.

Inventory