How Much Inventory Should I Start with an Online Store On Shopify?

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Determining how much inventory to start online store operations with is one of the most critical decisions for new e-commerce entrepreneurs. Too little inventory leads to stockouts and lost sales, while too much ties up capital and increases storage costs. The sweet spot differs for every business based on product type, target market, fulfillment model, and available capital.

In this guide, we’ll walk you through proven frameworks for calculating optimal starting inventory, industry benchmarks, and practical strategies for maintaining the correct stock levels.

Summary

• Capital Allocation: Commit 40% of your startup budget to inventory, protecting cash flow for marketing and operations
• Product Selection: Start with 10-30 focused products rather than hundreds of SKUs for manageable operations
• Calculation Methods: Use inventory turnover ratios, safety stock formulas, and reorder point calculations to determine quantities
• Industry Variations: Fashion, beauty, electronics, and other industries have unique inventory requirements and turnover expectations
• Fulfillment Strategy: Dropshipping requires minimal inventory, while traditional retail needs larger upfront investments
• Optimization Tools: Implement Shopify’s inventory tracking or third-party apps from day one for accurate management
• Growth Planning: Scale inventory based on sales data, seasonal patterns, and the 80/20 rule for bestsellers

Factors That Determine How Much Inventory Should I Start With Online Store

Before placing your first large order, several critical factors influence how much inventory you need. Understanding these variables helps you make informed decisions that align with your business model and financial capacity.

Your Business Model and Fulfillment Strategy

The amount of inventory you need depends heavily on your fulfillment approach:

• Traditional Retail: Requires larger upfront investments to stock physical inventory and fulfill orders yourself
• Dropshipping: Order products only after receiving customer orders, eliminating inventory risk entirely
• Print-on-Demand: Products created after purchase with zero inventory requirements
• Third-Party Logistics (3PL): Factor in minimum shipment quantities and storage fees at fulfillment centers
• Amazon FBA: Consider long-term storage fees and seasonal inventory restrictions at Amazon warehouses

Industry and Product Characteristics

Different industries have vastly different inventory requirements. Fashion retailers need multiple sizes and colorways for each style, significantly multiplying their stock-keeping units (SKUs). Seasonal products like winter coats or holiday decorations require strategic timing to avoid dead stock when the season ends.

Product shelf life matters tremendously. Beauty products and supplements have expiration dates that limit how long you can hold inventory. Electronics and technology products face obsolescence risk as new models are released. Non-perishable goods like jewelry or home decor offer more flexibility for holding inventory longer.

Consider your product’s price point when determining quantities. High-ticket items like furniture or electronics require less frequent replenishment but represent larger capital investments per unit. Lower-priced consumables like supplements or cosmetics turn over more quickly and may require larger order quantities.

Available Capital and Financial Constraints

Your starting budget fundamentally limits how much inventory you can purchase. As a general rule, commit no more than 40% of your initial capital to inventory for a new online store. This conservative approach protects you if products don’t sell as expected and ensures you have funds available for marketing, website improvements, and operating expenses.

Many suppliers offer volume discounts for larger orders, but resist the temptation to overextend your budget chasing per-unit savings. A smaller initial order allows you to test product viability and customer preferences before committing substantial capital.

Storage Capacity and Associated Costs

Physical storage constraints directly impact how much inventory you can reasonably hold. Whether you’re using a spare room, garage, or commercial warehouse, calculate your available square footage and how many units you can store efficiently.

Storage costs include rent, utilities, insurance, and security measures for your inventory space. Don’t forget to account for shelving, packaging materials, and organization systems. For products requiring climate control or special handling, these costs multiply quickly.

Supplier Lead Times and Minimum Order Quantities

Understanding your supplier’s capabilities and requirements is essential. Lead time—the period between placing an order and receiving inventory—determines how far in advance you need to reorder.

Supplier Location	Typical Lead Time	Safety Stock Recommended	Reorder Point Timing
Local/Domestic	3-7 days	1-2 weeks of sales	When the stock hits 2-3 weeks
National	1-2 weeks	2-3 weeks of sales	When the stock hits 4-5 weeks
International (Air)	2-4 weeks	4-6 weeks of sales	When the stock hits 8-10 weeks
International (Sea)	6-12 weeks	8-12 weeks of sales	When the stock hits 16-20 weeks

Most manufacturers and wholesalers enforce minimum order quantities (MOQs) that specify the smallest number of units they’ll sell. These MOQs may vary by product, with popular items having lower minimums and specialized products requiring larger orders. Factor these requirements into your planning to avoid being forced into larger purchases than your budget allows.

Demand Forecasting and Sales Projections

While new businesses lack historical sales data, you can still make educated projections. Research competitors selling similar products to estimate potential demand. Look at their customer reviews, social media engagement, and shipping times to gauge sales velocity.

Consider seasonal fluctuations in your niche. Q4 typically sees heightened e-commerce activity around Black Friday and the holiday season. Summer may be slower for some categories while peak for others like outdoor gear or swimwear. Build your inventory plan around these expected variations rather than assuming steady demand year-round.

How to Calculate How Much Inventory You Need for Your Startup Shopify Store

Moving beyond general guidelines, let’s examine specific formulas and calculations that help quantify your ideal starting inventory levels. These metrics provide objective data to support your inventory decisions.

The 40% Rule for New Businesses

For entrepreneurs launching their first online store, allocate approximately 40% of your total startup budget to inventory purchases. This conservative allocation ensures you maintain adequate cash flow for other essential expenses like website hosting, marketing campaigns, shipping supplies, and transaction fees.

Total Startup Budget	Inventory Allocation (40%)	Recommended Product Count	Units Per Product
$5,000	$2,000	10-15 products	10-20 units
$10,000	$4,000	15-25 products	15-30 units
$25,000	$10,000	25-40 products	25-50 units
$50,000	$20,000	40-75 products	50-100 units

This conservative allocation also provides a buffer if your initial product selection doesn’t resonate with customers as strongly as anticipated. As your business matures and you gather sales data, you can adjust this percentage based on your specific turnover rates and profit margins.

See more: Is Shopify Good for Small Businesses in 2026

Understanding Economic Order Quantity (EOQ)

Economic order quantity represents the optimal order size that minimizes the combined costs of ordering and holding inventory. While more applicable to established businesses with sales history, understanding the concept helps new entrepreneurs think strategically about order quantities.

The EOQ formula balances two competing costs: ordering costs (which decrease as you place fewer, larger orders) and holding costs (which increase as you stock more inventory). For new businesses without historical data, focus more on starting conservatively rather than optimizing this formula immediately.

Calculating Safety Stock Requirements

Safety stock acts as your buffer against unexpected demand spikes or supply chain delays. Even as a new business, planning for a modest safety stock level prevents stockouts during your critical early months.

A simplified approach for new stores: maintain safety stock equal to 1-2 weeks of projected sales. If you anticipate selling 50 units per month, keep an extra 12-25 units on hand beyond your expected sales inventory. This cushion helps you avoid losing sales to stockouts while you’re still learning your actual demand patterns.

For businesses with suppliers that have long lead times, increase your safety stock proportionally. A 12-week lead time from an overseas manufacturer requires significantly more safety buffer than a 1-week turnaround from a domestic supplier.

Determining Reorder Points

Your reorder point is the inventory level that triggers a new purchase order. Setting this threshold correctly ensures you never run out of stock while avoiding excessive inventory buildup.

Calculate reorder point using this formula: (Average daily sales × Lead time in days) + Safety stock.

For example, if you sell five units daily, your supplier needs 30 days to fulfill orders, and you maintain 50 units as safety stock: (5 × 30) + 50 = 200 units. When your inventory drops to 200 units, immediately place your next order.

This calculation becomes more accurate as you accumulate real sales data. Initially, use conservative estimates based on market research and competitor analysis.

Inventory Turnover Ratio and Its Importance

The inventory turnover ratio measures how many times you sell and replace your entire inventory within a specific period, typically annually. Higher turnover generally indicates efficient inventory management, though ideal rates vary significantly by industry.

Calculate turnover ratio as: Cost of Goods Sold (COGS) ÷ Average Inventory Value

Industry	Average Turnover Ratio	Days to Sell Inventory
Fashion & Apparel	4-6 times/year	60-90 days
Grocery & Food	12-15 times/year	24-30 days
Electronics	6-8 times/year	45-60 days
Furniture & Home Goods	2-3 times/year	120-180 days
Beauty & Cosmetics	8-10 times/year	36-45 days
Automotive Parts	4-5 times/year	73-90 days

For a new Shopify store, aim to turn your inventory at least 4-6 times in your first year. If you invest $4,000 in inventory with a 50% markup, you should target approximately $12,000-15,000 in revenue to achieve healthy turnover.

Calculating Days Sales of Inventory (DSI)

Days’ sales of inventory indicate how many days it takes to sell your current inventory completely. Lower DSI numbers generally signal more efficient inventory management.

Calculate DSI as: (Average Inventory ÷ Cost of Goods Sold) × 365 days

Alternatively: 365 ÷ Inventory Turnover Ratio

Using our previous example with a 5× turnover ratio: 365 ÷ 5 = 73 days. This means your inventory takes approximately 73 days to sell through completely.

Compare your DSI against industry benchmarks. A DSI of 60-90 days is reasonable for many product categories. Significantly higher DSI may indicate you’re overstocked or selecting products with limited appeal.

How Many Products Should I Start With Shopify

Beyond inventory quantity, product variety plays a crucial role in your store’s success. The right number of products balances customer choice with operational complexity.

Starting With a Focused Product Selection

Most successful new Shopify stores begin with 10-30 products maximum. This focused approach allows you to thoroughly understand each product, create compelling descriptions, and market effectively without spreading resources too thin.

A curated selection also simplifies inventory management during your learning phase. You’ll quickly identify which products resonate with customers and which underperform, allowing you to refine your offerings based on real data rather than assumptions.

Consider the “rule of thirds” for product selection: one-third proven bestsellers in your niche, one-third complementary products that enhance bestsellers, and one-third experimental items that differentiate your store.

Product Depth vs. Product Breadth

Product depth refers to variations within a single product line (multiple colors, sizes, or features of the same basic item). Product breadth describes the number of different product categories you offer.

For new stores, prioritizing depth over breadth often yields better results. If you sell t-shirts, offering 5 designs in multiple sizes and colors provides customers sufficient choice while keeping your SKU count manageable. This approach also positions you as a specialist rather than a generalist.

As you grow, you can strategically expand breadth by adding complementary product categories. A t-shirt store might add hoodies, then hats, then accessories—each expansion based on customer requests and proven demand.

Dropshipping Inventory Considerations

If you’re planning to operate a dropshipping model on Shopify, your inventory calculation changes dramatically. Since you don’t purchase products until after receiving customer orders, you eliminate upfront inventory investment and storage costs.

For dropshipping stores, import 20-50 products initially to your store catalog. Focus on products with reliable suppliers who ship quickly and provide quality items. You can scale your product count rapidly with dropshipping since you’re not constrained by capital or storage limitations.

However, maintain realistic expectations about which products you’ll actively promote. Marketing 50 products effectively requires significant effort. Many successful dropshippers initially market 3-5 core products heavily, using remaining catalog items as upsells or alternatives.

How Many Products Should I Have on My Shopify Store Long-Term

As your business matures, you can expand your product range based on data-driven insights. Successful Shopify stores vary widely in product count—some thrive with 20 focused products while others manage thousands of SKUs.

Monitor these indicators to determine when to expand your product line:

• Consistently selling out of popular items
• Receiving frequent customer requests for specific products
• Strong email list engagement when introducing new products
• Adequate cash flow to invest in expanded inventory

Avoid expanding simply to appear larger or more established. Each additional SKU increases complexity in inventory management, product photography, descriptions, and customer service. Expand strategically when you have evidence of demand and the operational capacity to manage growth.

Industry-Specific Inventory Guidelines

Different business types and industries require tailored approaches to inventory planning. Use these specific guidelines as starting points for your calculations.

Industry	Recommended Starting Products	Units Per Product	Initial Investment Range	Turnover Target
Fashion & Apparel	3-5 styles	10-15 units (per size)	$3,000-$8,000	4-6 times/year
Beauty & Cosmetics	5-10 products	20-50 units	$2,000-$6,000	8-10 times/year
Electronics	5-10 items	5-10 units	$5,000-$15,000	6-8 times/year
Home Goods	10-20 pieces	5-15 units	$4,000-$10,000	3-4 times/year
Jewelry	20-40 pieces	3-5 units	$2,000-$8,000	5-7 times/year
Supplements	3-5 formulations	100-300 units	$3,000-$10,000	8-12 times/year

Fashion and Apparel Stores

Clothing boutiques face unique inventory challenges due to size and color variations. Each style requires 5-10 SKUs (small through XX-large in multiple colors), rapidly multiplying your total inventory count.

Start with 3-5 core styles that represent your brand aesthetic. Order 2-3 units per size for each style, focusing on standard sizes (medium and large), which typically sell most frequently. This approach yields approximately 30-50 units initially.

Budget for higher inventory turnover in fashion—aim for 4-6 turns annually to stay current with trends. Plan seasonal transitions carefully, marking down current inventory before bringing in next season’s styles to avoid dead stock.

Beauty and Cosmetics Businesses

Beauty products require careful inventory management due to expiration dates and changing trends. Most cosmetics have 1-3 year shelf lives from manufacture, limiting your holding period.

Begin with 5-10 hero products that represent different categories (skincare, makeup, haircare). Order 20-50 units per product, depending on price point and expected demand. Lower-priced items like lip glosses may need larger quantities, while premium serums require fewer units.

Track batch numbers and expiration dates meticulously. Implement first-in-first-out (FIFO) inventory rotation to ensure older stock sells before newer shipments.

Electronics and Technology Products

Electronics face rapid obsolescence as manufacturers release updated models. Start with current-generation products that have proven market demand rather than trying to predict future hits.

Order conservative quantities for electronics given their higher per-unit costs and depreciation risk. Beginning with 5-10 units per SKU allows you to test demand while limiting exposure if products don’t sell as expected.

Pay attention to manufacturer release cycles. Buying inventory right before a new model announcement often leads to significant markdowns on previous-generation products.

Home Goods and Furniture

Larger items like furniture require substantial storage space and careful logistics planning. However, they also typically command higher price points and margins that support lower inventory turnover.

Start with 2-4 core pieces that showcase your style aesthetic. Order 3-5 units per item to allow for customer choice while managing space constraints. Many furniture retailers successfully operate with turnover ratios of just 2-3 times annually, given longer sales cycles.

Consider a hybrid model where you maintain an inventory of smaller accent pieces while using a made-to-order approach for larger furniture items. This strategy reduces capital requirements while still providing customers with immediate gratification on impulse purchases.

Supplement and Health Products

Supplements combine elements of beauty products (expiration concerns) with consumables (repeat purchase potential). Most supplements expire 2-3 years from manufacture, providing reasonable holding periods.

Start with 3-5 supplement formulations targeting related health concerns. Order 100-300 units per product, depending on pricing and projected demand. The consumable nature of supplements often leads to repeat customers, making customer acquisition cost particularly important to track.

Build subscription options into your Shopify store to create predictable recurring revenue and improve inventory forecasting. Customers on subscription plans provide visibility into future demand, allowing more confident inventory purchases.

Common Inventory Management Mistakes to Avoid

Learning from others’ mistakes helps you avoid costly errors as you launch your online store. Watch for these common pitfalls that trap new entrepreneurs.

Over-Ordering Due to Volume Discounts

Supplier volume discounts can be tempting, but ordering more inventory than you can sell within reasonable timeframes creates multiple problems. Your capital remains tied up in unsold products, storage costs accumulate, and product value may decline if items become dated or obsolete.

Resist the temptation to order 1,000 units just to hit a price break if your realistic first-year sales projection is 300 units. The per-unit savings won’t offset the carrying costs and lost opportunity to invest that capital elsewhere in your business.

Ignoring Seasonal Demand Fluctuations

Many products experience significant seasonal variation in demand. Halloween costumes, winter coats, graduation gifts, and holiday decorations all have obvious seasonal patterns. However, even less obvious products may have cyclical demand tied to seasons, holidays, or back-to-school periods.

Research your product category’s seasonal patterns before placing large inventory orders. Time your purchases so inventory arrives 4-8 weeks before peak demand periods, allowing you to market and build momentum before the seasonal rush.

Failing to Track Inventory Accurately

Without accurate inventory tracking, you can’t make informed purchasing decisions. Implement a system from day one—whether using Shopify’s built-in inventory management or a specialized third-party app.

Conduct regular physical counts to verify your system’s accuracy. Shrinkage from theft, damage, or administrative errors can quickly make your data unreliable if not caught early. Even small discrepancies compound over time and lead to stockouts or overordering.

Neglecting to Plan for Dead Stock

Dead stock—inventory that can’t be sold at regular prices—is nearly inevitable for e-commerce businesses. Products go out of style, get replaced by updated versions, or simply fail to resonate with your target audience.

Build dead stock management into your financial projections. Plan to discount 10-20% of your inventory in your first year as you learn customer preferences. Having a clear exit strategy for underperforming products prevents them from occupying valuable capital and storage space indefinitely.

Not Accounting for Hidden Inventory Costs

New entrepreneurs often focus exclusively on product purchase costs while overlooking numerous hidden expenses. These hidden costs significantly impact your actual inventory investment:

• Storage and Warehousing: Commercial space rent or opportunity cost of using personal space
• Utilities: Climate control, lighting, and security systems for inventory areas
• Insurance: Protection against theft, damage, or loss of inventory
• Packaging Materials: Boxes, bubble wrap, tissue paper, and branded inserts
• Shrinkage: Losses from theft, damage during handling, or administrative errors

Factor these additional costs into your inventory budget calculations. A common rule of thumb: add 15-25% to your product costs to account for carrying and handling expenses.

Setting Up Effective Inventory Management Systems for Shopify

Proper systems and processes make inventory management dramatically easier as your business grows. Invest time setting up these foundations early.

Using Shopify’s Built-In Inventory Tracking

Shopify includes basic inventory management features in all plan levels. Enable inventory tracking in your admin panel to automatically adjust stock levels when orders process. Set low stock alerts so you receive notifications when products drop below specified thresholds.

Configure your inventory settings to prevent selling products when out of stock, or allow backorders if you can fulfill orders within reasonable timeframes. Display remaining stock counts on product pages to create urgency for limited availability items.

Shopify’s inventory tracking becomes more powerful when combined with their analytics. Monitor which products sell fastest, identify slow-moving inventory, and track your overall inventory value over time.

Third-Party Inventory Management Apps

As your business grows beyond 30-50 SKUs, consider implementing specialized inventory management software that integrates with Shopify. Popular options include TradeGecko (now QuickBooks Commerce), Skubana, Stocky, and Cin7.

These advanced systems provide features like:

• Automated Purchase Orders: Generate orders automatically based on reorder points and lead times
• Multi-Location Tracking: Manage inventory across multiple warehouses or fulfillment centers
• Demand Forecasting: Predict future needs using historical sales data and seasonal patterns
• Advanced Reporting: Track inventory turnover, carrying costs, and identify dead stock
• Integration Capabilities: Connect with accounting software, shipping carriers, and marketplaces

Many apps offer free trials, allowing you to test functionality before committing. Start simple and add complexity only when your business operations demand more sophisticated tools.

Implementing Barcode Systems

Barcode scanning eliminates manual inventory counting errors and dramatically speeds up receiving, picking, and physical counts. Even small operations benefit from barcode systems.

Shopify generates barcodes for products automatically, or you can assign your own SKUs. Affordable barcode scanners (under $100) connect via Bluetooth to smartphones or tablets running Shopify apps, allowing you to scan products during receiving or when conducting physical counts.

Implement barcodes when you consistently handle more than 20-30 orders weekly. The time savings quickly justify the modest equipment investment.

Regular Inventory Audits and Cycle Counts

Physical inventory counts verify that your system’s numbers match actual stock on hand. Many businesses conduct annual full physical inventories, but cycle counting provides more frequent verification with less disruption.

Cycle counting involves counting a portion of your inventory regularly—perhaps 10-20% weekly—so you verify all products monthly or quarterly. This approach catches discrepancies faster and distributes the counting workload more evenly.

Schedule counts during slower business periods to minimize impact on order fulfillment. Document all discrepancies and investigate significant variances to identify and fix systemic issues.

Financing Your Initial Inventory Investment

Most new entrepreneurs need to fund their inventory purchases somehow. Understanding your financing options helps you acquire adequate stock without overextending financially.

Bootstrapping and Personal Savings

Using personal savings to fund inventory purchases avoids debt and maintains complete business control. However, this approach limits your inventory investment to available cash and creates personal financial risk.

If bootstrapping, start extremely conservatively with your initial inventory order. Reinvest profits from early sales to gradually expand your product line and stock levels. This slow-growth approach reduces risk but may limit how quickly you can scale.

Supplier Payment Terms and Trade Credit

Many established suppliers offer payment terms to qualified retailers, allowing you to receive inventory before paying for it. Common terms include Net 30 (payment due 30 days after delivery) or Net 60.

As a new business, you may struggle to qualify for supplier credit initially. Build relationships by starting with prepaid orders, paying invoices promptly, and gradually requesting payment terms as you establish a track record.

Small Business Loans and Lines of Credit

Business loans provide capital for inventory purchases while preserving personal savings. Traditional bank loans offer favorable rates but require strong credit and often collateral. Alternative lenders provide faster approval with less stringent requirements but charge higher rates.

Lines of credit offer flexibility—draw funds only when needed for inventory purchases and pay interest solely on the borrowed amount. This arrangement works well for seasonal businesses with variable inventory requirements.

Crowdfunding and Pre-Orders

Platforms like Kickstarter or Indiegogo allow you to validate product demand and raise capital simultaneously. Successful crowdfunding campaigns provide funds to manufacture your initial inventory while building a customer base before officially launching.

Pre-order campaigns through your own Shopify store serve similar purposes without platform fees. Offer modest discounts to early customers who order before you have inventory on hand. Use pre-order revenue to purchase your initial stock.

This approach works best for unique products with compelling stories. Generic products available from multiple sellers rarely succeed in crowdfunding unless you offer exceptional value or differentiation.

Optimizing Inventory Levels as You Grow

Your inventory strategy should evolve as your business matures and you accumulate sales data. These optimization strategies help you improve efficiency and profitability.

Analyzing Sales Data for Better Forecasting

After 3-6 months of operations, you’ll have valuable sales data to inform inventory decisions. Look for these key patterns:

• Bestselling Products: Ensure you never run out of high-performers with increased stock levels
• Slow Movers: Recognize underperformers early and develop exit strategies through discounts or bundling
• Day of Week Variations: Identify which days generate the most sales for targeted promotions
• Monthly Trends: Spot cyclical patterns that help predict future demand
• Promotional Response Rates: Measure how discounts and campaigns impact sales velocity
• Seasonal Fluctuations: Track how holidays and seasons affect different product categories

Use these insights to time inventory purchases more effectively and adjust stock levels proactively. Shopify’s built-in analytics provides basic sales reporting, but consider more advanced tools like Google Analytics or specialized e-commerce analytics platforms as your business grows.

The 80/20 Rule in Inventory Management

Pareto’s Principle applies to e-commerce inventory: approximately 80% of your sales typically come from 20% of your products. Identifying this vital 20% allows you to allocate inventory investment more effectively.

Stock your top-selling 20% more heavily with multiple backup units and shorter reorder cycles. Meanwhile, reduce inventory levels for the remaining 80% of products that generate limited sales. Some businesses only restock these slower products when they sell out, eliminating carrying costs for marginal items.

Regularly review which products fall into your top 20%—this group changes over time as trends shift and you introduce new products.

Implementing Just-in-Time Inventory Strategies

Just-in-time (JIT) inventory minimizes carrying costs by receiving products only as needed for customer orders. This approach requires reliable suppliers with short lead times and accurate demand forecasting.

JIT works particularly well for dropshipping models or when working with domestic suppliers who can fulfill orders within days. The strategy becomes riskier with overseas suppliers where 4-12 week lead times make responding to demand spikes challenging.

Many successful Shopify stores use a hybrid approach: maintaining on-hand inventory for bestsellers while using JIT for slower-moving products. This strategy balances customer satisfaction with capital efficiency.

Seasonal Inventory Planning

As you gather annual sales data, seasonal patterns become clearer. Plan inventory purchases with these cycles in mind rather than maintaining constant stock levels year-round.

Build inventory 6-8 weeks before seasonal peaks to ensure adequate stock when demand increases. Begin discounting seasonal items 2-3 weeks before the season ends to clear inventory before demand crashes.

Many industries have well-established seasonal patterns you can research: Q4 dominates most retail categories, back-to-school drives August/September sales for certain products, and summer peaks demand for outdoor and vacation-related items.

Key Takeaways

• Start with approximately 40% of your total budget allocated to inventory when launching a new online store, protecting cash flow for other essential expenses.
• Begin with 10-30 focused products rather than attempting to compete with larger stores offering hundreds of SKUs, allowing you to master operations before scaling.
• Calculate reorder points using lead time and safety stock formulas to prevent stockouts while avoiding excessive inventory buildup.
• Track inventory turnover ratio and days sales of inventory metrics from day one, using these benchmarks to identify optimization opportunities.
• Implement systematic inventory management through Shopify’s built-in tools or specialized apps before complexity overwhelms manual tracking methods.

Conclusion 

Determining how much inventory to start online store operations with requires balancing cash flow, customer expectations, supplier requirements, and storage capacity. Start conservatively with your initial investment—testing products with smaller orders validates demand before committing substantial capital. As you accumulate sales data, optimize inventory levels with confidence based on real performance metrics rather than assumptions.

Ready to build a high-performing Shopify store with optimized inventory management? Contact our e-commerce development team to discuss how we can help you launch successfully.

FAQs  

How Much Inventory Should I Start With a Shopify Online Boutique?

Allocate approximately 40% of your starting budget to inventory for a new boutique. Focus on 15-25 core pieces across 3-5 product categories that represent your brand. Order 2-3 units per size for apparel items.

How Much Inventory Should I Start With a Shopify Jewelry Store?

Start with 20-40 jewelry pieces across multiple price points. Jewelry doesn’t have size variations or expiration dates, allowing smaller initial investments. Focus on hero pieces that showcase your design aesthetic and style.

What Percentage of Sales Should Inventory Be for an Online Store?

Inventory should represent 25-35% of your monthly revenue for healthy cash flow. This ratio varies by industry and business maturity. New businesses may carry higher inventory percentages initially before optimizing efficiency.

When Do You Need a Lot of Inventory to Open a Shopify Store?

You need larger inventory only when you’ve proven customer demand through initial sales. New stores should start small. Expand inventory levels after achieving consistent sales for 3-6 months and identifying your bestselling products.

How Do I Calculate How Much Inventory to Order for a New Shopify Store?

Calculate using: (Average daily sales × lead time in days) + safety stock. For new stores without sales history, use conservative projections based on competitor research and industry benchmarks. Start with 60-90 days of projected inventory.

How Many Products Should I Start With on Shopify?

Begin with 10-30 products for most stores. This range provides sufficient variety for customer choice while keeping operations manageable. Dropshipping stores can start with more (20-50 products) since capital requirements are minimal.

Does Shopify Have Inventory Management?

Yes, Shopify includes built-in inventory tracking in all plans. You can track stock levels, set low-stock alerts, view inventory history, and prevent overselling. Third-party apps provide additional advanced features for larger operations.

How Can Shopify Handle Large Inventory?

Shopify supports unlimited inventory SKUs on all plans. Shopify Plus offers additional features for enterprise-level operations, including advanced inventory reporting, multiple location management, and bulk operations for high-volume stores.

Source: https://ecommerce.folio3.com/blog/how-much-inventory-should-i-start-with-an-online-store-on-shopify/

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