How to Set Up and Manage Shopify Inventory Locations

Are you looking for ways to set up inventory locations in Shopify?

And not sure how to do it

Then don’t worry, I’ll help you do it.

But before we jump directly into the steps, let's first know what Shopify inventory locations are and how they work.

Having a clear understanding of this feature will make it easier to set up locations correctly, assign inventory, manage stock, and streamline order fulfillment.

In this guide, you'll learn what inventory locations are in Shopify, assign products to them, configure fulfillment priorities, manage inventory across locations, and follow best practices to keep your inventory organized as your business grows.

What Are Shopify Inventory Locations?

Shopify inventory locations are the physical places where you store, sell, or fulfill your products.

A location can be a warehouse, retail store, pop-up shop, or a fulfillment partner such as a 3PL.

You can track inventory for each location separately in Shopify instead of maintaining a single inventory count for your entire business.

You get the clear idea of where stock is available and helps Shopify decide where an order should be fulfilled from.

For example, imagine you're running a skincare brand with a warehouse in Texas and a retail store in New York.

If you have 500 face serums in total, Shopify doesn't simply show "500 in stock."

Instead, it tracks how many units are available at each location, making it easier to fulfill orders from the most appropriate place.

Shopify Inventory Location Limits by Plan

The type of Shopify subscription you are paying for determines how many inventory locations you can create.

Here's a quick overview of how many locations you can manage as per your plan.

How to Set Up Inventory Locations in Shopify

Setting up inventory locations only takes a few minutes, but configuring them correctly is what ensures accurate inventory tracking and smooth order fulfillment.

Step 1: Add a new inventory location.

To create a new location, open your Shopify admin and navigate to:

Settings → Locations

Click Add location and enter details such as:

• Location name
• Address
• Contact information
• Whether the location fulfills online orders

Once saved, Shopify will recognize it as a location where inventory can be stored and managed.

If you're adding a retail store that only serves walk-in customers, you can choose not to use it for online order fulfillment.

Step 2: Assign inventory to locations.

After creating the location, assign products to it.

Go to any product in your Shopify admin and open the Inventory section.

From there, specify which locations stock that product and enter the available quantities.

With this, you get a clear understanding of your stock availability.

Step 3: Set fulfillment priority

If the same product is available at multiple locations, Shopify uses fulfillment priority to determine where an order should be fulfilled from.

Choosing the right fulfillment order can significantly improve operational efficiency.

Many merchants prioritize warehouses for online orders while keeping retail store inventory available for walk-in customers and local pickup.

Your ideal setup depends on how your business operates, but it's worth reviewing fulfillment priorities regularly as you add new locations.

This is something discussed by the VP of Product at Shopify in The Unofficial Shopify podcast.

She emphasized that as merchants grow, having well-organized operational data and workflows becomes increasingly important for running an efficient business and not just for fulfillment today, but for supporting future Shopify capabilities as well.

Listen to the full podcast here.

How to Manage Inventory Across Multiple Shopify Locations

Adding multiple inventory locations is only the first step.

But you also need a process for moving inventory between locations, keeping stock levels accurate, and ensuring orders are fulfilled from the right place.

Without a clear inventory management workflow, it's easy to end up with one warehouse running out of stock while another is overstocked.

Here are some best practices for managing inventory across multiple Shopify locations.

Transfer inventory between locations.

Inventory transfers allow you to move stock from one location to another without manually adjusting inventory counts.

This is useful when you're replenishing retail stores, redistributing inventory between warehouses, or preparing for seasonal demand.

To create an inventory transfer in Shopify:

1. Go to Products > Transfers.
2. Click Create transfer.
3. Select the origin and destination locations.
4. Add the products and quantities to transfer.
5. Mark the transfer as Ready to ship and later Received once the inventory arrives.

Recording transfers instead of making manual inventory adjustments helps maintain an accurate inventory history and reduces the chances of stock discrepancies.

Adjust inventory quantities when needed.

Not every inventory change comes from a sale or transfer. You may also need to update stock levels due to other reasons like returns, damaged inventory, misplaced product, etc.

Whenever possible, include a reason for inventory adjustments. This creates a clear audit trail and makes it easier to identify recurring inventory issues.

Keep inventory balanced across locations.

Reviewing inventory levels regularly helps you identify these imbalances before they affect order fulfillment.

A simple approach is to monitor:

• Fast-selling products at each location
• Products that haven't moved in a while
• Inventory that's approaching reorder levels
• Locations that frequently transfer stock to others

Making inventory transfers proactively is often more cost-effective than expediting customer orders later.

Real-world example: As Weebot expanded from a single store to multiple retail locations and warehouses, managing inventory through spreadsheets became inefficient.

After centralizing inventory management with Shopify POS, the company gained real-time visibility into stock across every location and simplified inventory transfers.

The streamlined workflow reduced in-store processing time by 50% and contributed to a 15% increase in retail revenue, demonstrating how better inventory visibility can improve both operational efficiency and customer experience.

Read the full case study here.

Local Pickup, Product Availability, and Fulfillment Rules

Shopify's location settings don't just determine where inventory is stored; they also affect how customers receive their orders.

If configured correctly, inventory locations let you offer convenient fulfillment options while ensuring customers only purchase products that are actually available.

Enable local pickup

If you operate one or more retail stores, enabling local pickup allows nearby customers to collect their orders instead of waiting for shipping.

After enabling local pickup for a location, eligible customers will see it as a delivery option during checkout when the selected products are available there.

This is particularly useful for businesses that combine online and in-store sales, helping reduce shipping costs while giving customers more flexibility.

How Shopify chooses a fulfillment location

When an order is placed, Shopify determines which location should fulfill it based on factors such as:

• Inventory availability
• Fulfillment priority
• Whether the location is configured to fulfill online orders

If your preferred location doesn't have enough inventory, Shopify automatically checks the next eligible location.

However, if the required quantity isn't available in a single location, Shopify may split the order across multiple locations.

While this ensures the customer receives their products, it can also increase shipping costs and operational complexity.

Manage product availability by location.

Not every product needs to be available everywhere.

For example, a retailer may only stock winter jackets in colder regions while offering lightweight apparel across all locations.

By assigning products to specific locations, you can:

• Keep inventory organized
• Prevent customers from ordering unavailable products.
• Support location-specific product catalogs.

Taking a few minutes to review product availability can help avoid unnecessary fulfillment issues later.

Common Shopify Inventory Location Challenges

While Shopify's inventory locations make it easier to organize and fulfill inventory, managing multiple locations can introduce operational challenges if your inventory isn't updated consistently.

Here are some of the most common issues merchants face.

Inventory discrepancies

This happens when the stock shown in Shopify doesn’t match the physical quantities available at a location.

It can happen due to manual inventory adjustments, unrecorded stock transfers, damaged products, or inventory counting errors.

To reduce discrepancies, you can conduct regular inventory audits, record every inventory adjustment, and ensure your team follows a consistent process when receiving or transferring stock.

Split shipments

If a customer's order contains products stored at different locations, Shopify may split the order into multiple shipments.

This can increase shipping costs, packaging expenses, and delivery times.

To minimize split shipments, keep frequently purchased products stocked together at your primary fulfillment locations and review inventory distribution regularly.

Overselling inventory

Overselling happens when customers purchase products that are no longer available at a specific location.

This is especially common for merchants selling across multiple channels or manually updating inventory.

Keeping inventory synchronized and transferring stock before a location runs out can significantly reduce the risk of overselling.

Inefficient fulfillment

Without properly configured fulfillment priorities, orders may be shipped from a location that's farther away, even when another location could fulfill the order faster or at a lower cost.

Review your fulfillment priorities periodically, especially after adding new warehouses or retail stores, to ensure orders are routed from the most appropriate location.

FAQs

Can I have multiple inventory locations in Shopify?

Yes. Shopify supports multiple inventory locations, but the maximum number depends on your subscription plan.

Can the same product be stocked at multiple locations?

Yes. A product can be assigned to multiple locations, with separate inventory quantities tracked for each one.

How do I transfer inventory between Shopify locations?

Go to Products > Transfers, create a transfer by selecting the origin and destination locations, add the products and quantities, and mark the transfer as received once the inventory arrives.

Why is Shopify splitting my orders?

Shopify splits orders when a single location doesn't have enough inventory to fulfill the complete order. Keeping inventory balanced across locations can help reduce split shipments.