Shopify Locations: How to Use Them to Manage Inventory

Last updated on May 17th, 2022 at 04:26 pm

In today’s world, where consumers can get just about anything in a few clicks, it’s more important than ever for retailers to meet customer demands for faster delivery. 

How can you make this happen? Smarter order fulfillment practices. 

Your customers are likely located all over the country—or world—and using a single fulfillment center can make it nearly impossible to efficiently reach all of the people who purchase from you. Using a distributed inventory system means you can use fulfillment or distribution centers closest to your customers to automatically fulfill orders each time an order is placed in your store.

You have more control and better visibility over your inventory across your business with multiple locations. The Shopify locations feature seeks to make this process even easier.

Keep reading to learn more about Shopify locations and how they can help you prioritize and manage inventory and establish new distribution points for your ecommerce business. 

What Are Shopify Locations?

Selling online makes order fulfillment and scaling easier for today’s retailers. In this new multichannel online experience, location is extremely relevant. As your operations expand, so will the places where you store and manage inventory. 

A Shopify location refers to a physical location—like an internal warehouse or that of a dropship supplier—from which you sell merchandise, store inventory, or fulfill orders, among other things. A location can also be a physical brick-and-mortar store. 

Is There a Limit to How Many Shopify Locations You Can Manage?

Your Shopify subscription plan determines how many locations you can set up. Here are the maximum number of locations per plan:

  • Shopify Lite: 3 locations
  • Basic Shopify: 4 locations
  • Shopify: 5 locations
  • Advanced Shopify: 8 locations
  • Shopify Plus: 20 

If you use inventory apps that physically stock inventory for you, they’re treated as locations. These include third-party logistics services, dropshipping apps, and custom fulfillment services. For example, you might set up an app that fulfills orders on your behalf. You’ll find apps like this listed in your Locations settings, as well as in your custom fulfillment locations, but they don’t count towards Shopify’s location limit.

Deactivated locations also don’t count towards your plan limit. You can see how many locations you have set up by visiting your Locations settings page in Shopify.

Shopify locations

Using Multiple Shopify Locations

As you likely know, managing inventory and fulfillment across multiple channels and warehouse locations becomes more challenging as your business grows. Shopify locations exist as a multiple-location management function that empowers you to assign and monitor inventory in all locations where you store inventory or fulfill orders. This makes managing inventory and fulfilling orders much easier, whether your inventory is housed in warehouses, storefronts, dropshipping facilities, or elsewhere. 

You can easily track your inventory across all locations by using Shopify’s multiple locations feature, which gives you time to focus on other aspects of your business. In your Settings, Shopify allows you to set up several locatings for tracking inventory and fulfilling orders at multiple locations. 

Using this feature, you can easily see which locations are under-or overstocked with specific items, as well as whether it’s necessary to move products from one location to another. You’ll also be able to determine whether it’s time to place an order with your supplier and ship inventory to a specific location. 

Each Shopify location is seen as a fulfillment center that tracks inventory levels for each of your SKUs. As customers place orders, Shopify assigns them to a location depending on your set priorities and SKU availability (in that order). An ecommerce operations platform like Flxpoint can be set up to pull inventory from any or all of your Shopify locations.

As a merchant, setting up multiple Shopify locations is ideal if:

Multiple locations are ideal for you, the merchant, if:

  • You want to route orders to another fulfillment center if another source is out of stock
  • You want specific orders for certain locations to route to your own warehouse or fulfillment method and the rest to another location
  • You want to accept preorders in Shopify that you’ll fulfill at a later date
  • You accept international orders

Why Multiple Locations?

Most ecommerce businesses are adopting multichannel strategies—and there are endless distribution channel options. Dropshipping suppliers, retail stores, pop-up markets, marketplaces, warehouses and every other place it’s possible to stock and handle inventory are all possibilities. Shopify’s multiple locations feature allows you to sell products, ship or fulfill customer orders, and manage inventory for each channel independently. 

Effective Multi-Warehouse Management

Maintaining stock levels and ensuring stock flow is challenging for ecommerce retailers, as each process and component must be approached and handled correctly. When you have more than one warehouse, products can be shipped to customers in a more timely manner. Not only does this reduce the amount of labor required to deliver products to your customers, but it also lowers the cost of shipping as well.

A multi-warehouse inventory management solution enables you to keep track of your stock in real-time through a single, unified system. As you scale your operations, you can achieve the benefits of an effective distributed inventory system with multiple locations.

Providing Unique Shopping Experiences

Creating separate Shopify stores is a way to sell to a more niche customer base. By providing a customized experience, you can attract the attention of new customers and stand out from the competition by including local references or specific tastes in your design and/or marketing materials.

You could open a high-end boutique, a discount outlet, and a general shop under the same brand yet segment your customers so they find exactly what they’re looking for.

This also streamlines the buying process, as your customers don’t have to navigate through overloaded menus to find the products they want. The key is to make the ordering process as effortless as possible so that customers are more likely to complete a purchase.

Offering Local Pickup and Delivery

With an accurate view of multiple locations’ inventory data, you can route orders between store locations if you have more than one brick-and-mortar store. This also allows you the ability to offer your customers the option to buy products online and pick them up in-store if inventory availability allows. 

Exploring New Dropshipping Opportunities 

You can use Shopify locations to add additional supplier catalogs and track inventory by location. With this option, you can expand your product catalog and offer a greater product assortment to your customers. 

How to Fulfill Shopify Orders With Multiple Locations Enabled

When customers place orders online, the orders are assigned to a fulfillment location based on your priority preferences and available inventory. You’ll need to specify your store’s priority sequence to fulfill orders. 

If a location has adequate available inventory, that location’s inventory is used. If none of your locations are able to satisfy an entire order, Shopify generates a split order and it is fulfilled among several locations. If necessary, you can change an order’s fulfillment location from the order details tab.

Any Shopify POS orders are allocated to the available inventory at the point of sale. However, if orders are placed at a POS to be delivered to a customers’ address, that order is fulfilled based on delivery priority instead of store location. 

Add and Prioritize a Shopify Location

To set up and prioritize Shopify locations:

  • Go “Settings” > “Locations” in your Shopify admin dashboard
  • Click “Add location”
  • Enter the name and address of each location (Note: If you’re using Shopify’s shipping rates feature, you must enter the location’s full address)
  • Check “Fulfill online orders from this location” if you want the location’s inventory to be available for online fulfillment
  • Click “Save”

Any new location is added as the last location in your fulfillment priority list. If you want to edit the fulfillment priority list, click “Edit fulfillment priority.” You can change the order of the locations by dragging and dropping each location.

Shopify location fulfillment priority

In the following example, the internal warehouse is at the top of the list, so it is set as the primary location. If the internal warehouse is out of an item, fulfillment priority will switch to the Supplier A location, and so on if necessary.

Set default Shopify location

Change Inventory Quantities

When you create a product in Shopify, it’s shown as stocked in one location, which is the shipping origin of your store. If your store has more than one location, the inventory of the product at each location is shown on the product information tab. 

You must update the specific inventory quantities at each of your locations to ensure that your inventory quantities are accuracy. You can update the quantities individually or import inventory with a CSV file by using the bulk editor, unless you have a third-party solution for managing inventory. 

To update the quantities:

  • Navigate to and select the desired product or variant
  • Scroll down to the “Inventory” section and click the quantity for a location in the “Available” column.
  • Adjust or set the actual quantity of your inventory using positive or negative numbers
  • Click “Save”

Shopify inventory quantities

Are There Challenges to Using Multiple Shopify Locations?

Yes. Although using multiple Shopify locations for fulfillment adds more versatility and differentiation to your fulfillment process, there are some things to keep in mind before diving in.

Tracking inventory across multiple locations can be quite challenging, and multiple-location fulfillment limitations have made it more difficult to update and track inventory completely accurately. This presents more than one limitation for retailers:

It’s Harder to Offer “Pick Up In-Store” Options

Unless you can guarantee your inventory counts at each location, it’s virtually impossible to implement a successful pick-up in-store program and use your brick-and-mortar stores as fulfillment locations. Real-time inventory tracking is essential if you’re seeking to track inventory efficiently across your supply chain. Without it, you risk stockouts and other fulfillment nightmares that can harm your brand’s credibility, anger your customers, and cost you money.

Managing Orders and Fulfillments Is More Challenging

Another challenge of managing multiple fulfillment locations is managing orders. As your customers place orders for the same products across multiple sources, errors, confusion, and delays may occur. 

You’ll have an easier time managing orders and returns if you employ a centralized order management solution. Look for a system that offers prompt order processing and tracking, along with the ability to sell from multiple locations and process orders from a single application.

Combine Shopify Locations With Flxpoint for a Smarter Multichannel Fulfillment Strategy

Setting up multiple Shopify locations allows you to establish new distribution points, optimize inventory levels, manage inventory, and fulfill orders more effortlessly. Within a few clicks, it’s possible to allocate and prioritize inventory by location. However, setting up multiple Shopify locations can involve more work—and leave more room for error.

Flxpoint solves many of the challenges associated with multiple locations by allowing you to track inventory levels in real-time, sync inventory, assign orders, and much more. Flxpoint also allows you to sell inventory across even more channels using pre-built ecommerce platform connectors and lets you set channel-specific rules for pricing, categories, and attributes. 

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