Inventory glossary

What is Allocated inventory?

Allocated inventory is stock that is already assigned to a specific order, channel, or purpose, even though it has not shipped yet.

Allocated inventory matters because it tells you what stock is actually free to sell. If you ignore it, your store can show items as available when they are really reserved for another order, leading to overselling and angry customers.

Check allocated inventory before running a promotion or taking a large wholesale order. Reconcile it regularly so stock does not stay locked up by orders that were cancelled or never finalized.

Formula

Available inventory = On hand inventory - Allocated inventory

Example

A candle store has 100 units of a jar candle on hand. 30 units are allocated to a wholesale order waiting to ship and 10 units are allocated to a holiday gift box build. That leaves 60 units free to sell on the website.

Common mistakes

  • Confusing allocated inventory with inventory that has already shipped.
  • Forgetting to subtract allocated stock before promising it to a new customer.
  • Letting allocations sit too long without releasing stock back when an order is cancelled.

Allocated inventory and SteadyShelf

SteadyShelf forecasts and reorder suggestions work from your sales history and lead times, not from allocation status, so track allocated stock separately before deciding final order quantities.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

Related terms

Committed inventory · On hand inventory · Available to promise · Quantity on hand · Overselling

Full inventory glossary

FAQ

Is allocated inventory the same as committed inventory?

No. Committed inventory is stock already tied to unfulfilled orders. Allocated inventory can also include stock set aside for planned uses, like a wholesale order or a future promotion, before an order even exists.

How do I calculate available inventory?

Subtract allocated inventory from on hand inventory. The result is what you can safely sell or promise to new orders without overselling.

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