Inventory glossary

What is Inventory planning?

Inventory planning is the process of deciding how much stock to buy, when to buy it, and how much to keep on hand to meet expected sales without tying up too much cash.

For a small Shopify store, inventory planning is the difference between having what customers want and sitting on cash you can't use. If you plan well, you order the right amounts at the right time and avoid both stockouts and overstock. If you skip it and just reorder by gut feel, you end up with dead stock in some SKUs and missed sales in others.

Good inventory planning means looking at sales history, lead times, and seasonality for each variant, then setting rules for when to reorder and how much. It is not a one-time task. You revisit it as sales trends shift, suppliers change lead times, or you add new products.

Example

A candle store sells 20 units a week of its lavender candle. The supplier lead time is 3 weeks, and the store wants 1 week of safety stock. Lead time demand is 20 x 3 = 60 units, plus safety stock of 20 units, so the reorder point is 80 units. The owner plans to order 120 units each time, enough to cover roughly 6 weeks of sales, based on the supplier's case pack of 24.

Common mistakes

  • Planning only for best-selling SKUs and ignoring slow movers until they run out or pile up.
  • Using one reorder rule for every product instead of accounting for different lead times and sales speeds.
  • Not updating the plan after a sales spike or slowdown, so old numbers drive new orders.

Inventory planning and SteadyShelf

SteadyShelf supports inventory planning by forecasting sales per variant and turning that into an order-by date and suggested quantity for each SKU.

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

Related terms

Demand forecasting · Reorder point · Safety stock · Min max inventory · Lead time

Full inventory glossary

FAQ

How often should a small store revisit its inventory plan?

Check it at least monthly, and sooner if you notice a sales trend change, a new supplier lead time, or a seasonal shift coming up.

Does inventory planning mean the same thing as forecasting?

No. Forecasting predicts future demand. Inventory planning uses that forecast, along with lead times and cash constraints, to decide actual order timing and quantities.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

Get early access