Magento 2 Inventory: Best Practises to Improve Order Fulfillment

• By Kiwi Commerce
• 31 Dec, 2025
• Magento 2

Magento 2 Inventory: Best Practises to Improve Order Fulfillment

Inventory issues are one of the most common reasons for delayed deliveries, cancelled orders and unhappy customers. Even established retailers struggle with inaccurate stock levels, especially as product ranges grow and fulfilment becomes more complex.

Magento 2 provides a powerful inventory management system designed to give better stock visibility, streamline fulfilment and reduce costly errors. When set up and managed correctly, it can significantly improve how quickly and accurately orders reach customers.

In this guide, we explore how Magento 2 inventory works and the best practises you can follow to optimise order fulfilment.

Magento 2 offers a flexible inventory framework that supports everything from single-warehouse stores to businesses operating across multiple locations. The system helps merchants track stock in real time, allocate inventory intelligently and automate key fulfilment processes.

At its core, Magento 2 inventory management is about accuracy, visibility and control.

Magento 2 stock management provides real-time insights into inventory levels across your entire catalog. You can track what is available, reserved for orders, or running low, helping you make informed fulfillment decisions.

Key benefits include:

• Real-time inventory updates
• Bulk and individual stock adjustments
• Clear in-stock, out-of-stock, and backorder settings
• Detailed visibility at the SKU level

Accurate stock data is the foundation of reliable order fulfillment, ensuring smooth operations and satisfied customers.

Magento allows you to define detailed product attributes such as size, color, weight, and availability. These attributes are especially useful when managing configurable products or large catalogs.

Clear product data helps:

• Reduce picking and packing errors
• Improve warehouse efficiency
• Enhance customer search and filtering

Well-structured product variations lead to smoother fulfillment operations.

Magento 2’s Multi-Source Inventory (MSI) feature allows businesses to manage stock across multiple warehouses, stores, or fulfillment partners.

With MSI, you can:

• Assign inventory to multiple sources
• Automatically route orders to the best location
• Reduce delivery times and shipping costs
• Avoid unnecessary order splitting

For growing businesses, MSI plays a key role in scaling fulfillment efficiently.

Magento 2 integrates with ERP systems, POS platforms, shipping providers and third-party logistics tools. These integrations ensure inventory data remains consistent across all channels.

When integrations are properly maintained, they eliminate manual updates and prevent fulfilment delays caused by data mismatches.

To get the most from Magento 2 inventory management, correct configuration is essential.

Important setup steps include:

• Defining minimum and maximum stock levels
• Setting low-stock thresholds and alerts
• Limiting purchase quantities where necessary
• Assigning products to the correct inventory sources

You can also enable stock notifications to inform customers when products are back in stock, helping recover missed sales opportunities.

Magento 2 tracks inventory movements across purchases, sales, transfers and adjustments. This visibility helps businesses understand how stock flows through the fulfilment process.

Returns and refunds can also be managed efficiently through structured workflows, ensuring stock levels remain accurate and returned items are handled correctly.

Magento 2 supports several advanced inventory strategies that improve fulfillment flexibility:

• Bundled products: Move multiple items together while tracking individual components accurately
• Dropshipping: Allow suppliers to ship directly to customers without holding physical stock
• Backorders and pre-orders: Enable customers to reserve products that are out of stock or yet to be released

When used transparently, these strategies improve customer experience and demand forecasting.

To maximise the benefits of Magento 2 inventory management and improve order fulfilment, consider the following best practises:

Keep Inventory Data Accurate

Ensure SKUs, attributes and stock statuses are consistent across your catalogue. Clean data reduces fulfilment errors and confusion in the warehouse.

Enable Real-Time Stock Updates

Real-time updates prevent overselling and ensure customers only purchase available products, especially during high-traffic periods.

Set Low-Stock Alerts and Reorder Points

Use Magento’s alerts to stay ahead of stock shortages. Reorder points based on sales velocity help maintain consistent fulfilment.

Use Multi-Source Inventory Strategically

Prioritise fulfilment locations that reduce delivery times and shipping costs. Proper source assignment improves order routing efficiency.

Automate Inventory Processes

Automation reduces manual errors and speeds up fulfilment. Stock deductions, order allocation and alerts should all be automated where possible.

Monitor Inventory Movement

Regularly review stock movement reports to identify slow-moving items, discrepancies or operational inefficiencies.

Handle Returns Carefully

Ensure returned items are only added back to stock once inspected and approved. This keeps available inventory accurate.

Integrate All Sales Channels

Keep Magento synced with ERP, POS and logistics systems to maintain a single source of truth for inventory data.

Use Reports to Improve Decisions

Magento’s reporting tools help analyse stock turnover, product performance and fulfilment trends.

Perform Regular Inventory Audits

Even with automation, physical checks remain essential. Cycle counts help identify issues early and maintain confidence in stock data.

 

Some common issues businesses face include stock discrepancies, integration sync problems and unexpected stockouts. Regular audits, monitored integrations and proactive replenishment planning help prevent these problems before they impact fulfilment.

Final Thoughts

Magento 2 inventory management plays a critical role in delivering fast, accurate and reliable order fulfilment. When inventory is configured correctly and supported by the right processes, businesses can reduce delays, prevent stock issues and meet customer expectations with confidence.

From real-time stock updates and Multi-Source Inventory to automation and reporting, Magento provides the tools needed to manage inventory at scale. However, unlocking their full potential often requires expert planning, configuration and ongoing optimisation.

KiwiCommerce specialises in Magento development and custom eCommerce solutions, helping businesses design, optimise and scale Magento stores for long-term growth. Our Magento development experts work closely with merchants to build inventory workflows that improve fulfilment efficiency, reduce operational friction and support business expansion.

Whether you need help configuring Magento 2 inventory, implementing Multi-Source Inventory, integrating third-party systems or optimising your store for high-volume order fulfilment, KiwiCommerce delivers tailored Magento development solutions that drive real results.