WooCommerce Inventory Management Explained for Manufacturers
Running a small business online can be challenging.
And it isn’t made any easier by the fact that there are tons of e-commerce platforms available for you to start trading from.
You want to pick the best platform out there, and with a little research, you’ll quickly discover that there is one option that dominates the market - WooCommerce.
WooCommerce powers over 28% of all online stores. Impressive!
But, how does WooCommerce inventory management hold up for scaling manufacturers?
WooCommerce inventory management is great, but if you're a manufacturer, it's far from enough. In this article, we uncover what you need to do to succeed as a manufacturer selling with WooCommerce.
Simplify your store management with the WooCommerce inventory management solution powered by Katana MRP.
If you’re a seasoned WooCommerce user, skip straight to limitations to find out what you’re missing.
Otherwise, let’s begin.
PRO TIP: If you're already using an alternative e-commerce platform such as Shopify, then we’ve got you covered! We have an article covering everything you need to know about Shopify inventory management for manufacturers.
What Is WooCommerce?
WooCommerce is a free and open-source e-commerce WordPress plugin that lets modern manufacturers sell online.
The fact that the plugin is open source lets product-making businesses use modifications and customize their site, providing businesses with more control over how they sell their products online.
Best of all, WooCommerce isn’t just limited to physical products, you can also sell software, services, and digital goods too. This is perfect for any manufacturers who offer installation packages along with their products.
WooCommerce inventory management doesn’t have a limit on the number of products and images you can have on your site.
Essentially, WooCommerce aids manufacturers in getting more control over their store, design, and scalability.
WooCommerce gives you the opportunity to set-up your preferred payment gateways (it doesn’t have to be limited to online, you can also set-up check or cash on delivery payments) and shipping specifications (such as the weight and dimensions of the units you sell).
Finally, advanced features let you enable automated taxes. This basically means WooCommerce inventory will automatically calculate the associated taxes on a product when a customer makes a purchase. Great for those trading internationally.
Yes, we know, this is all pretty awesome for a free plugin.
That is basically how the e-commerce platform works and can benefit your business.
But, the big question on all manufacturer's lips, what about WooCommerce inventory management?
How WooCommerce Inventory Management Works
There is a built-in system to let you manage inventory WooCommerce style. Though, to actually track inventory, you have to Enable Stock Management in the Products Inventory Settings.
WooCommerce inventory management allows you to manage your stock and track inventory, however, the function has to be enabled for this to work properly.
If you do not select this feature, you will only be able to see the stock status’ in the Product Data Inventory box.
If you decide not to use WooCommerce inventory management to automatically track changes, you’ll be responsible for updating the status of your stock.
As you can already see, WooCommerce inventory management isn’t the most in-depth system and can only track your finished products. This is going to be an issue for manufacturers who also need a system to track raw material inventory.
But before we get into the limitations and solutions for WooCommerce inventory management, we’ll quickly investigate how to get your inventory set-up.
How to Set-Up WooCommerce Inventory
Managing WooCommerce inventory is straightforward if you’re just handling finished products.
You simply select WooCommerce (once you have it installed on your WordPress), and you can start your inventory management process.
Firstly, adding products will fall into one of four categories:
— Simple Product;
— Grouped Product;
— External/Affiliate Product; and
— Variable Product.
PRO TIP: This WooCommerce inventory variations screenshot was taken from the video below. If you want a full in-depth analysis of the inventory management system built into WooCommerce, be sure to check the video out.
We’ll talk through each one, but the two main ones you’ll be using as a product-making business is simple products and variable products.
You would select this when you’re selling a product that isn’t sold in any other WooCommerce inventory variations.
For example, if you’re a fashion designer and you sell a salsa dress in only one color and size. You’ll just need your product information and marketing materials to upload the dress individually as a simple product.
This is where you make a type of product that comes in different WooCommerce inventory variations.
For example, you finally realize that selling that salsa dress in only one size and color isn’t the best business strategy, so you decide to up your game and include different versions.
Using the variable product function saves you from having to enter each product variant separately.
But what about the two other options?
This option is for if you have products that you’re taking a commission on by displaying on your site.
But why would you do this?
Well, perhaps you support artists by helping them learn how to make woolen shirts, but instead of selling them yourself, you take a commission on what the artist sells.
By making an affiliate product, it’ll open the point of sales externally to where the artist sells that product.
This is for any business who practices inventory kitting in their business. If you sell products in a bundle, you can display them on your website by using the grouped products feature.
However, it should be mentioned that if you group items, customers will also have the choice to purchase items individually.
So, if several items of clothing are grouped together to make an outfit, a customer is able to pick and choose what they like from that outfit.
Whilst you’re setting up your products, or after you have finished, you can go ahead and set your reorder points (on the WooCommerce inventory management system it’s referred to as “Low Product Threshold”).
This will let the WooCommerce inventory management send you a notification when stock is running low.
During this stage, you can set the product’s stock levels and SKU's, which will help you navigate your WooCommerce inventory.
PRO TIP: If you’re struggling to come up with your own SKU’s you can take advantage of a free SKU generator.
You can also set-up upsells and cross-sells.
This means that WooCommerce inventory management will suggest these linked products to customers when they’re shopping on your site.
Upsells – This will appear on a product page as a recommendation such as “others have purchased these items along with this product”
Cross-sells – Products will be suggested to the customer when they’re in the cart
If you’re a product-making business that sells different versions of the same item, there is a way to save the different types of WooCommerce inventory variations to make it easier in the future when adding more product variables.
Under “Products”, go to attributes to save your WooCommerce inventory variations.
For example, if your products come in different colors, you can save these WooCommerce inventory variations as:
Once you have done that, go to “Terms” on the right side of the screen, select “Configure terms”, and then save the colors which are commonly used.
Once you have done this, when setting up your products in the future you can simply select the new variations you have created and save a ton of time creating new products.
And that’s it in terms of getting started on WooCommerce inventory management.
You’ve probably already noticed there are some downsides to using WooCommerce, especially as a product-making business.
But to its credit, it’s quick, easy, and gives you a lot of control over your business for free... Well, in principle.
So, let’s look at the obstacle's manufacturers will have to overcome if they decide to rough it out in WooCommerce inventory management.
Limitations of Using WooCommerce Inventory Management
First things first, a few times in this article we have mentioned that using WooCommerce inventory management is free. This is true, the only issue is its only built-in mind for getting control over your store.
You’re still going to need to pay for other things such as themes, your domain, SSL certificate, security, etc.
A rough estimated cost of all these additional requirements can run up to $1,000 per year!
Don’t freak out just yet, this is an estimation calculated with the more expensive bells and whistles a website might need, but the hidden costs are something you should take into consideration and research:
WooCommerce Inventory Management: Free
Running a Website: Not Free
So, what are the other issues and limitations product-making businesses should take into consideration when deciding to continue or get started with WooCommerce inventory management?
1. WooCommerce Inventory Management Doesn’t Support Raw Material Inventory
WooCommerce inventory management is only designed to track the inventory of finished products, and many other manufacturing businesses use a 3rd party app such as material requirements planning software to bridge this feature gap.
2. Can’t Track Inventory at Multiple Locations
If you have multiple selling points or keep inventory at different locations, for example, maybe you have inventory on consignment with a wholesaler, you’ll need to track that inventory separately and manually.
3. Inconvenient to Handle a Large Database
As your business begins to grow, WooCommerce inventory management begins to strain under the pressure.
Sure, you can add finished products onto the system, but raw material management and production planning are going to be handled elsewhere, usually in Excel spreadsheets. Unfortunately, the issue is Excel spreadsheets are notoriously prone to mistakes.
4. Can Only Update Products Individually
For whatever reason, be it a change in design or perhaps pricing, you need to change details regarding your products. Unfortunately, with the current WooCommerce inventory management, you can’t update products in bulk and you’ll need to go through each product individually every time you need to make an adjustment.
5. Time Consuming
WooCommerce gives you a lot of features and is fantastic considering it’s free, but to manage inventory WooCommerce style is going to cost you a lot of your time to be able to keep up with your ever-changing stock without incorporating some extra muscle in the form of a 3rd party app.
You should keep in mind that WooCommerce has been designed primarily for drop shippers or for scaling manufacturers who don’t have a complicated manufacturing process.
That doesn’t mean that WooCommerce is unusable, you should just be aware that WooCommerce inventory can quickly become an annoyance if you aren’t aware of some of the features it lacks.
You’re still going to need to find a solution to other areas of your manufacturing business that isn’t supported by WooCommerce or any other e-commerce platform for that matter.
As a manufacturer you’re still going to need to figure out how to:
— Save your bill of materials (BOMs);
— Schedule your production; and
— Oversee your floor-level progress.
So, if inefficient Excel spreadsheets are out of the question, what other programs can possibly help you with all this?
Manage Your WooCommerce Inventory with Smart Manufacturing Software
Many other manufacturers found that they were able to get complete control over their WooCommerce by integrating Smart Manufacturing Software into their business, which allows them to receive sales orders, manage production, and fulfill orders all from one place.
Katana’s Smart Manufacturing Software has been designed specifically in mind for manufacturers who’re selling direct to consumers, but need a tool in place to help with the manufacturing process such as their production and inventory management.
Smart Manufacturing Software allows manufacturers to:
1. Manage Raw Material Inventory
Get a better understanding of your raw material and finished product stock levels by integrating Katana into your WooCommerce inventory management.
Not only will you now be able to see your inventory levels in real-time, but our unique auto-booking system takes your available material and allocates it to your most recent manufacturing orders, letting you know immediately if you need to order new materials to finish production.
2. Save BOMsHave all your BOMs saved in one place for you and your teammates to easily find in the future. Best of all, once you have saved your BOMs, Katana will automatically know which raw materials need to be allocated to any of your future manufacturing orders.
3. Schedule Production
Once your resources and BOMs have been saved onto Katana, the software will automatically schedule the production of manufacturing orders in the order in which they’re created. However, if you need to prioritize an order, our nifty drag-and-drop system allows you to easily do so.
4. Monitor Floor-Level Progress
Our visual and easy-to-understand dashboard allows you to track the progress of your projects, and the tasks team members need to complete. This is achieved with the simple RAG (red, amber, green) system so you can quickly get an overview of your entire production.
5. Synchronize Stock Levels and Track Inventory at Different Locations
Finally, bridge the WooCommerce inventory management gap seamlessly by getting stock synchronization and track multiple inventory levels at different locations.
The stock sync feature simply means that any changes to stock levels made in Katana will be reflected in WooCommerce. So, if you’re a make to stock business and you finish production on some products, your inventory level on WooCommerce will also increase to show this change.
The main purpose of using Smart Manufacturing Software is to centralize your entire manufacturing business onto one dashboard and give you the breathing space to grow your company and so you can get back to what you love doing most, making your products.
Makesense was able to get more control over their inventory by ditching spreadsheets and adopting Katana to help them with their supply chain management.
How was Makesense able to achieve this? They did it by:
— Tracking exactly what material is booked for what project;
— Setting re-order points to avoid stock-outs; and
— Being able to quickly adapt by easily changing production schedules.
How to Integrate WooCommerce with Katana
Integrating your WooCommerce and Katana accounts is easy and straightforward.
1. Create an account or simply log in to Katana
2. At the top of the dashboard select “Settings” and access “Integrations”. Here you will see the different platforms and services Katana can integrate with.
Select “Connect” on WooCommerce.
3. At this point, a new window will appear. Go ahead and search for your store by entering the website’s address.
4. Once finished you’ll be able to access the initial data import settings where you can import your current stock from WooCommerce onto Katana, along with product information, customer information, any open orders, and even synchronize your inventory levels.
Once you have finished configuring your settings, go ahead and click “Next”.
5. At this window, you can review your settings and if happy, go ahead a select “Connect”.
And there we have it, your WooCommerce is now fully integrated, and you can now start to breathe a little easier by managing your inventory in real-time and from one dashboard.
Take a look at our in-depth video detailing everything you need to know to get set-up on Katana.
WooCommerce is an awesome plug-in to consider using to manage your business’s online store, especially considering it gives you the tools to do so free of charge.
However, WooCommerce inventory management is going to be extremely difficult to maintain without avoiding mistakes which will be costly to your business in the long run.
Use WooCommerce to manage your store, but fully optimize your business by integrating Smart Manufacturing Software that’ll allow you to manage your inventory, develop your master product schedule, oversee production status’ and fulfill sales orders all from one centralized dashboard.
Why not test out integrating your WooCommerce inventory into Katana yourself? We offer a 14-day free trial, so you can experience firsthand how Smart Manufacturing Software can help your business.
We hope this article has been helpful and if you have any questions, please don’t hesitate to get in touch. Until next time, happy manufacturing.