Inventory glossary

What is Reserved inventory?

Reserved inventory is stock that is already assigned to an order or purpose, so it cannot be sold to other customers even though it still sits on the shelf.

Reserved inventory matters because your on-hand count can lie to you. If you look at total stock without subtracting what is reserved, you will think you have more to sell than you actually do, and you risk promising it to a second customer.

Use reserved inventory to calculate what is truly available to sell. Subtract reserved units from on-hand units before deciding whether to reorder or whether to show a product as in stock.

Formula

Available inventory = On hand inventory - Reserved inventory

Example

A candle store has 80 units of a jar candle on the shelf. 25 of those are tied to unfulfilled wholesale orders. Available inventory is 80 - 25 = 55 units. If a new customer orders 60 units online, the store can only actually fulfill 55 without reordering.

Common mistakes

  • Treating on-hand count as available count without subtracting reservations.
  • Forgetting to release a reservation after an order is cancelled, which understates available stock.
  • Not reserving stock for pending wholesale or pre-orders, leading to overselling on the online store.

Reserved inventory and SteadyShelf

SteadyShelf forecasts and reorder suggestions work from your available stock position, so accurate reservation data keeps order-by dates and quantities realistic.

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

Related terms

On hand inventory · Committed inventory · Available to promise · Overselling · Allocated inventory

Full inventory glossary

FAQ

Is reserved inventory the same as committed inventory?

They are close. Reserved inventory is stock held back for a specific reason, such as a pending order. Committed inventory usually refers specifically to stock promised against confirmed sales orders. Many small stores use the terms interchangeably.

Does reserved inventory show up in on-hand counts?

Yes. On-hand inventory includes reserved stock because it is physically still in your warehouse or store. It just is not available to sell to a new customer.

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