Magento Tutorials

Learn Magento with us

How to set up inventory configuration in Magento

  1. From Magento Admin panel to System→Configuration
  2. Fill out Stock Options
  3. Fill out Product Stock Options
  4. Click "Save Config" button

Inventory is one of the things you constantly have to keep an eye on when running online store.

Great thing is that Magento will, by default, make this rather easy for you, but first, you need to know your way around.

Rows below will lead you through all the if’s and but’s related to managing inventory, so get comfy and log in to your admin panel.

Start by navigating to System and choosing Configuration.


Choose Catalog from the left hand side menu, and click Inventory as seen on the image below:

Managing inventory in Magento

Firstly, click to expand Stock Options and start filling out tabs according to your needs.

This is what you will see, when Stock option tab is expanded:

Setting up stock options in Magento

Now, let’s go tab by tab and see what options are given to store owners:

  • Set Item’s Status to be In Stock When Order is Cancelled – it is always recommended to set this tab to Yes.
  • Decrease Stock When Order is Placed – should also be set to Yes, since you wish to make Magento able to reduce quantity for products you no longer have on your store.
  • Display Out of Stock Products – this one is rather self explanatory – set this tab to Yes if you wish to continue showing products even if they are sold out, or keep them hidden from the catalog, by choosing No. It’s important however to pay attention to a small note below this tab – your products will still be available if product URL is typed or bookmarked by your customers. Also, always have your customers in mind and make sure that even if you chose to continue displaying your products, you make it clear that at the moment they are out of stock.
  • Only X left Threshold – is set to “0” by default. In order to enable this option and show how many items you have left on your store’s front end, enter preferred value into this field.
  • Display products availability in stock in the frontend – choose whether you wish to inform your customers how many product items you still have by setting this field to Yes. It is an option that is worth rethinking – some of the biggest websites are doing a great job using scarcity in order to achieve great results and increase online sales.

Moving on, here is how to set up other Product Stock Options.

Setting up product stock options

Under product stock options, a small note will greet you and you should read it carefully – settings below will be applicable to cart line items only, and will not reflect on entire shopping cart.

An important one to remember!

Start from top to bottom and fill in the following fields:

  • Manage Stock – this is where you should decide whether you wish for Magento to be responsible for your stock management in the first place. You can do so by simply choosing Yes or No from the dropdown menu.
  • Backorders – this is the point where you need to decide whether you will allow backorders on your store. In a nutshell, backordering means that you will allow your customers to place an order that contains items that are currently not in the stock on your online store. If you choose to allow backorders, have in mind your order status will now appear exactly the same as orders that contain products you do have in stock. Your backorder will not change its status, and it will keep “pending” order status until you have enough items in your stock to ship the product to the customer. Also, it is important to know that product quantity will have a negative value, as sort of a reminder for a shop owner that new items need to be made/ordered. When it comes to your order overview, this is how it will appear, once more reminding you that items were backordered:


There is another option when managing backorders that you should get familiar with.

Let’s say that your product stock is currently “10” and you have backorders enabled on your store.

That means that customer will still be able to order “15” items, meaning only five will end up impossible to deliver at that particular moment.

We want to show you how it will appear on your order view – you will notice that item status will be set to – Partial.

Take a look:

Moving on, let’s see what is the best way to fill out other fields when setting up inventory configuration.

  • Maximum Qty Allowed in Shopping Cart – will let you determine maximum number of items in customer’s cart. This is an option that can come quite handy, especially if you sell limited series of certain items. In case you wish your product to reach wide audience, you can easily prevent one customer buying your product in bulks. Also, maybe you have decided to create new store view for wholesale for example, and you wish to offer special conditions to these customers, you can easily do so through this tab. Another, more than useful Magento feature, is the possibility to easily set up maximum quantities of products in shopping carts for different customer groups. All you need to do is click Add Minimum Qty orange button, choose the customer group you wish to set up quantity for, and save your settings. Note that by clicking Add Minimum Qty orange button multiple times, you will be able to set up quantities for as many groups as you wish. Clicking red Delete button will let you easily remove customer groups you previously added.
  • Notify for Quantity Below – default field setting is “1”. You can, of course, enter the value you need, but have in mind that entering “0” will disable this option and store owners will not be notified if their inventory is reduced, or completely sold out.
  • Enable Qty Increments – is an amazing possibility offered by Magento. By default, this field will be set up to No. Choosing Yes from the dropdown menu will open new tab where you can set up your preferred increment. Entering, let’s say value of 10 will allow your customer to order 5, 10, 20 etc., but never 6 pieces of certain product.
  • Automatically Return Credit Memo Item to Stock – this field will let you choose whether you wish your stocks to update automatically once credit memo is issued to your customers. It is a quite useful option, but remember, it is disabled by default, so make sure you set this field to Yes if you wish for Magento to help you out with your stocks in case you have to issue credit memo to buyers.

Good job, you are all done.

Now, simply click Save Config orange button and save your changes.

In case you change the way you are handling inventory in future, simply log in and revert your changes according to your needs, it’s super easy!