Marketplace Inventory Management: A Complete Guide To Optimal Performance

Marketplace Inventory Management: A Complete Guide To Optimal Performance

Making sure you have the right amount of products to sell is crucial for any business, especially multi-vendor platforms. Therefore, if you’re operating such an e-commerce venture, it’s to your best benefit to master marketplace inventory management.

Whether you’re the marketplace operator or a vendor selling products through the platform, understanding inventory management is key to ensuring smooth operations and customer satisfaction. For this reason, today’s guide will explore the basics of inventory management, specifically focusing on its significance in online multi-vendor marketplaces.

We’ll discuss why marketplace inventory management matters and the essential functionalities it entails. Furthermore, we’ll teach you practical steps to implement it using WC Vendors – a powerful marketplace solution in WooCommerce.

So let’s begin!

What Is Inventory Management?

Inventory management is the process of supervising and regulating the movement of products within a business. Typically, it involves tracking inventory levels, replenishing stock when necessary, and optimizing inventory turnover.

Efficient inventory management maintains the appropriate stock levels to fulfill customer demand. In addition, it entails minimizing excess inventory and associated costs.

What is marketplace inventory management?

Marketplace inventory management involves coordinating the inventory of multiple vendors who sell their products through a multi-vendor platform.

Marketplace inventory management includes functionalities such as:

  • Allowing vendors to manage their stock levels
  • Providing real-time visibility into inventory quantities
  • Enabling notifications for low stock levels
  • Making it easier for vendors and the marketplace manager to communicate about inventory levels

Basically, marketplace inventory management aims to ensure that all sellers and the marketplace itself work smoothly together to handle inventory well.

marketplace inventory management
Marketplace inventory management ensures smooth and successful operations for the platform

Why You Need Marketplace Inventory Management

Marketplace inventory management is essential for several reasons:

  • Optimized stock levels: It ensures the marketplace has the right amount of stock to meet customer needs. Moreover, it helps prevent excess or shortages of popular items.
  • Improved customer experience: Accurate inventory management guarantees that customers can easily find and buy the products they want, without facing out-of-stock situations or delays.
  • Vendor empowerment: Equipping vendors with tools and abilities to handle their inventory instills a feeling of ownership and control. As a result, you can expect improved product availability and vendor satisfaction.
  • Data-driven decision-making: Having real-time inventory data empowers marketplace operators/administrators to make well-informed decisions regarding purchasing, pricing, and inventory allocation strategies.
  • Reduced costs: Efficient inventory management reduces the expenses linked with holding excessive inventory. Moreover, it minimizes the risk of lost sales from stockouts.
  • Enhanced marketplace performance: Keeping inventory information accurate and current through marketplace inventory management enhances the marketplace’s efficiency. As a result, it can contribute to the platform’s success.

How To Manage Your Marketplace Inventory (In 3 Simple Steps)

If your multi-vendor platform is powered by WC Vendors, then marketplace inventory management should be easy. In fact, all it takes is a few steps!

WC Vendors lets you easily create a WooCommerce multi-vendor marketplace
WC Vendors streamlines the creation, launch, and management of online marketplaces

If you’ve yet to use WC Vendors to build a marketplace, check out the following guides:

With all that in mind, let’s begin!

Step 1: Enable stock management options

First things first: you must grant your platform inventory management capabilities.

Thus, head to your WordPress dashboard, then click WooCommerce > Settings > Products > Inventory. Basically, this takes you to the Inventory page, which boasts all the options associated with inventory management.

Navigating to the Inventory page
Navigating to the Inventory page (click to zoom)

Many of the options on this page can be useful. However, the most important thing to do here is to enable the Manage Stock option by ticking its checkbox. This gives you and your vendors marketplace inventory management powers.

Enabling stock management
Enabling stock management (click to zoom)

If you want notifications sent to you and/or your marketplace administrators when items are low in or out of stock, tick the Notifications option’s two checkboxes.

Make sure to pinpoint the Notification recipient(s). In your case, this could be your email and/or the emails of your marketplace administrators.

If you want your vendors to be similarly notified about their stock levels, tick all three of the Vendor Notifications option’s checkboxes.

Enabling marketplace inventory management options
Enabling marketplace inventory management options (click to zoom)

Consider enabling the other options on this page, as well!

Once you’re happy with your settings, scroll down the page and click the Save Changes button.

Step 2: Grant vendors marketplace inventory management capabilities

Next, you must allow your vendors to manage their stocks via their frontend dashboards.

However, before we proceed, let’s talk about a crucial interface known as the product form.

Product form

The product form appears on the frontend vendor dashboard.

Product Form on the Vendor Dashboard showing the General tab
Part of the product form (click to zoom)

This form collects data about the product that a vendor wants to add to their store. Basically, it achieves this by having the vendor fill up various data fields. The data they provide is stored in the marketplace backend and displayed to customers via the product listing.

Through your customization efforts, you can have this product form ask vendors for information about their stock.

For example, if a vendor submits a “toy duck” to the marketplace, the form can ask them how many toy ducks the vendor has in their inventory. If the vendor inputs “100” on the form, then the marketplace backend will know the toy duck’s stock quantity is at 100. At the same time, this stock quantity is displayed on the product listing for customers to see.

Inputting a stock quantity of 100
Inputting a stock quantity of 100 (click to zoom)

Do you need a more detailed exploration of the creation of products and product listings? Then read our article, “Vendor Products Handbook: Mastering Your Marketplace Product Listings (Full Guide)!”

Vendor Products Handbook: Mastering Your Marketplace Product Listings (Full Guide)

Customizing the product form

Navigate to your WordPress dashboard and click WC Vendors > Settings > Forms > Product. This takes you to a page allowing you to customize the product form.

forms - product
Navigating to Forms: Product (click to zoom)

Head down to Inventory. By default, this option’s fields are enabled, meaning you don’t have to tick any checkboxes. However, you can require vendors to submit information associated with these fields by ticking their “Required” checkboxes.

Customizing the Inventory Fields
Customizing the Inventory Fields (click to zoom)

For this tutorial, we don’t recommend ticking the “Hide” checkboxes. Hiding a field removes it from the product form, preventing vendors from submitting information crucial to marketplace inventory management.

We recommend keeping the following fields enabled:

  • Manage Inventory: Gives vendors the option to manage an item’s stock
  • Stock Qty: Allows vendors to input the quantity of an item available in their inventory
  • Stock Status: Lets vendors be notified about an item’s stock status
  • Low Stock Threshold: Enables vendors to set a product stock quantity threshold, triggering a notification when the item reaches the specified stock level

Enabling the following fields is up to you:

  • Backorders: Lets customers place orders even when an item is out of stock, resulting in a negative quantity
  • Sold Individually: Allows customers to purchase only one of a product per order

Once you’re happy with your configuration, scroll down the page and click the Save Changes button. This activates your settings so that they’re reflected on the frontend vendor dashboard.

Below is an example of the frontend product form, demonstrating marketplace inventory management enabled, and filled with information provided by a vendor:

First part of a completed product form
1st part of a completed product form (click to zoom)
Second part of a completed product form
2nd part of a completed product form (click to zoom)
Third part of a completed product form with marketplace inventory management enabled
3rd part of a completed product form with marketplace inventory management enabled (click to zoom)

Step 3: View and/or edit product stock quantities

The marketplace operator/administrator can also check and/or edit the quantity of each product remaining in vendors’ inventories.

To do so, head to your WordPress dashboard. Then, click Products > All Products. Basically, this redirects you to a page listing the products every vendor is selling via your marketplace.

A product list with marketplace inventory management enabled
A product list with marketplace inventory management enabled (click to zoom)

Viewing stock quantities

As you can see below, with marketplace inventory management enabled, stock quantities are displayed under the “Stock” column. Moreover, it shows out-of-stock items and the quantity of their backorders.

A product list showing items that are in and out of stock
A product list showing items that are in and out of stock (click to zoom)

For example, the vendor store “Art Inspired” has 75 of the product “Emotional Sky” remaining in their inventory.

Meanwhile, the product “Dog Sweater With Ears (Grey)” is out of stock at “Mimiru’s Pet Sanctuary.” However, customers have made 16 backorders of the item.

Editing stock quantities

As the marketplace operator/administrator, you can edit stock quantities yourself. To do so, choose the product whose stock quantity you wish to edit, then click its name or edit button. This takes you to the item’s Edit Product page.

Then, scroll down to the Product Data box. Then, click the Inventory panel to access a section offering marketplace inventory management options.

Navigating to the product data box inventory section
Navigating to the Product Data box Inventory section (click to zoom)

As you can see, this section provides you with the same options available to vendors on the frontend product form. This means you can change these settings any time you wish.

To modify the stock quantity, enter a different number. In our “Dog Sweater With Ears (Grey)” example, we’ll change the product’s “Out of Stock” status by replacing the -16 with 99. In addition, we’ll prohibit backorders, raise the low stock threshold, and limit purchases to 1 item per order.

Modifying the stock quantity and other details
Modifying the stock quantity and other details (click to zoom)

Once done, click the Update button to implement these changes.

Would you like more detailed information on adding and managing products? Then read this WooCommerce documentation.

When you revisit the list of products, you’ll see that the item is now in stock, with 99 products in the vendor’s inventory.

The product is now in stock
The product is now in stock (click to zoom)

Take note: Before updating an item’s stock information, make sure to coordinate with its vendor. This will prevent data inaccuracies and misunderstandings with the vendor.

Putting It All Together: An Example Of Marketplace Inventory Management In Action

What happens now that marketplace inventory management is possible? Basically, the vendor dashboard and marketplace backend will reflect changes in inventory information caused by customer purchases, vendor activities, and actions taken by the marketplace operator/admin.

The customer’s perspective

Let’s say the vendor store Mimiru’s Pet Sanctuary offers a product named “Dog Cowboy Costume,” with a current stock of 99 pieces.

Dog Cowboy Costume product listing
Dog Cowboy Costume with a stock quantity of 99 (click to zoom)

Now, what happens when a customer purchases one Dog Cowboy Costume? The item’s stock quantity should drop from 99 to 98.

The vendor’s perspective

Aware of the sale, the vendor goes to their vendor dashboard to examine their product list. They look for Dog Cowboy Costume and discover that its stock quantity has indeed gone down from 99 to 98.

Product list showing a drop in stock quantity from 99 to 98
A product on the vendor dashboard with a drop in stock quantity from 99 to 98 (click to zoom)

The marketplace operator/admin’s perspective

The marketplace operator finds out about the sale. Thus, they check the product list in the marketplace backend. They discover that the Dog Cowboy Costume stock quantity has dropped from 99 to 98.

Dog Cowboy Costume with a stock quantity of 98
A product in the marketplace backend with a drop in stock quantity from 99 to 98 (click to zoom)

This proves the marketplace inventory management functionality is working perfectly.


Effective marketplace inventory management is crucial for the success of your multi-vendor e-commerce platform. By keeping the right amount of products, giving vendors control, and making it easy for everyone to discuss inventory, you can make customers happier, save money, and make the whole marketplace work better.

With the right tools, handling inventory in a multi-vendor marketplace isn’t just possible, it’s a big help in growing and succeeding.

To recap, you can use WC Vendors to implement effective marketplace inventory management by observing the following steps:

  1. Enable stock management options
  2. Grant vendors marketplace inventory management capabilities
  3. View and/or edit product stock quantities

Do you have any questions about marketplace inventory management? Reach out to us and let us know; we’d be happy to hear from you!