How to Automate Supplier Orders on Shopify

Want to save time and avoid stockouts in your Shopify store? Automating supplier orders is the answer. Manual processes like spreadsheets and emails are slow and error-prone, often leading to missed reorder points or overstocking. Automation solves these issues by using real-time data from your Shopify store to create precise purchase orders, reduce errors, and improve efficiency.

Here’s how to get started:

Organize your data: Assign unique SKUs, track inventory accurately, and set up supplier profiles with details like lead times and minimum order quantities.
Set reorder rules: Use formulas to calculate reorder points and safety stock to ensure timely restocking.
Leverage AI tools: Apps like Forstock integrate with Shopify to forecast demand, recommend reorder points, and automate purchase orders.
Automate workflows: Trigger purchase orders when stock falls below thresholds and streamline supplier communications.

How to Automate Forecasting and Purchase Order Creation for your Shopify Store

Shopify

Preparing Your Shopify Store for Automation

To make the most of automation, you need clean, organized data. Without it, automation tools won’t know what to reorder, when to reorder it, or which supplier to use. According to IBM research, automation can reduce processing times from days to just hours.

Most of the prep work happens in Shopify’s admin dashboard, where you manage your product catalog and inventory. The focus here is on two main tasks: organizing your product and inventory data and setting up detailed supplier profiles.

Setting Up Product and Inventory Data

Every product you want to reorder automatically needs a unique SKU (stock keeping unit). Shopify allows you to assign SKUs at both the product and variant levels. For instance, a medium black t-shirt could have the SKU "TSHIRT-BLK-M", while the large version might be "TSHIRT-BLK-L." This consistent naming system simplifies applying reorder rules. Some merchants even include supplier codes in their SKUs to make vendor mapping faster.

Enable Shopify's inventory tracking feature and update your counts regularly. Performing routine cycle counts ensures Shopify accurately tracks on-hand, available, and committed quantities - data that automation tools use to trigger reorders. Fast-moving items typically need weekly checks to keep numbers up to date.

Proper location setup is equally important. Assign distinct locations, like a California warehouse, a New Jersey 3PL, or a New York store, to generate accurate location-based orders. Tracking inventory separately for each location ensures the system creates precise purchase orders and updates stock levels correctly.

Beyond basic quantities, product-level details such as lead times (how long it takes to receive an order after placing it) are crucial for timing reorders. Other factors like vendor costs per unit, pack sizes, and sales velocity help determine how much to reorder. Standardize your units of measure - most U.S. stores use pieces, cases, or pounds - and record costs in U.S. dollars with proper decimal formatting (e.g., $12.50).

Area to Prepare	What to Configure in Shopify	Why It Matters for Automation
Product catalog	Unique SKUs, variants, and clear naming	Ensures tools match products to suppliers and purchase orders.
Inventory tracking	Enable tracking and maintain accurate on-hand counts	Prevents incorrect reorder triggers and stock discrepancies.
Locations	Set up warehouses, stores, and 3PLs as distinct locations	Enables location-based purchase orders and accurate receiving.
Product attributes	Lead times, costs, pack sizes, and sales velocity	Drives reorder quantities and timing decisions.

Organizing Supplier Information

Accurate supplier profiles are vital for generating correct purchase orders. Build complete profiles for each vendor, including:

Legal name, display name, primary contact, email, and phone number
Payment terms (e.g., Net 30) and preferred currency (usually USD for U.S. suppliers)
Order lead times, factoring in seasonal variations during busy periods
Minimum order quantities (MOQs) and pack sizes
Freight or delivery methods and cutoff days

Map each SKU to its default supplier to streamline purchase order creation. This ensures that when a product's stock falls below its reorder point, the system knows which supplier to contact and which location to ship to.

Before fully automating, run a test phase where the system suggests orders but doesn’t send them automatically. Review these suggestions to ensure lead times, MOQs, and supplier assignments align with your actual operations. Adjust your data as needed before going live.

Tools like Forstock can make this process easier by syncing with Shopify and flagging missing or inconsistent fields. For example, if a product doesn’t have a lead time or assigned supplier, Forstock highlights the issue so you can fix it. Once your data is in good shape, Forstock’s AI-powered forecasting can create 12-month demand plans and recommend reorder points for each SKU and location. It can even generate purchase orders that account for lead times, safety stock, and MOQs.

With your product and supplier data well-organized, your Shopify store will be ready to handle automated order workflows. This solid data foundation is key to setting up accurate reorder rules and leveraging AI-powered forecasting, which we’ll explore next.

Setting Up Reorder Rules and Automation Logic

Once you've organized your product data and supplier profiles, the next step is to establish clear rules for when and how much to reorder. These rules are the backbone of your automation strategy, ensuring you maintain optimal stock levels without tying up too much capital in excess inventory.

Start by setting service goals, like achieving a 95% order fulfillment rate, and defining constraints such as working capital limits, minimum order quantities (MOQs), and case pack sizes. These factors will help you determine which SKUs to prioritize for automation - usually your top revenue-generating items or those with long supplier lead times.

Calculating Reorder Points and Safety Stock

A reorder point (ROP) is the inventory level at which a new purchase order should be triggered. The formula is straightforward:
ROP = (Average Daily Sales × Lead Time Days) + Safety Stock

For example, if you sell 5 units per day, have a 14-day lead time, and keep 70 units as safety stock, your ROP would be 140 units. When your total stock - on-hand plus inbound - drops to 140, the system can automatically trigger a purchase order.

Safety stock acts as a buffer against unexpected demand spikes or supplier delays. For fast-moving SKUs with consistent sales, you might calculate safety stock using one to two weeks of average sales. For slow-moving or seasonal items, you may need more specific rules, like holding an extra case pack during peak months and minimal stock in the off-season.

To set these rules accurately, pull at least 6–12 months of historical sales data (excluding stockout periods) from Shopify or other connected tools. Combine this data with current stock levels, open purchase orders, and supplier lead times. Refresh inventory data daily - or even hourly during busy seasons - to ensure accuracy.

Once you’ve calculated reorder points and safety stock, automate workflows to trigger orders when stock falls below the threshold for a specific SKU or collection. These workflows can draft purchase orders with recommended quantities based on your target stock levels, rounded up to meet supplier MOQs or case pack sizes. For lower-value items, the system might send orders automatically, while high-value SKUs could require manual approval.

When deciding reorder quantities, aim to balance stock availability with cash flow. A common approach is to cover a specific demand period, like 45 days, while factoring in supplier case packs and freight costs. For example, if a product sells 10 units daily, the base reorder quantity would be 450 units. However, if the supplier ships in cases of 100 units and freight costs drop significantly at 600 units, you might round up to 600 instead.

While these basic rules work well for stable products, more advanced forecasting methods can handle fluctuating demand.

Using AI-Powered Demand Forecasting

To take your reorder logic to the next level, consider integrating AI-powered demand forecasting. Traditional reorder methods rely on a single average daily sales figure, which works for steady products but may fall short for seasonal items, promotional periods, or growth trends. AI tools like Forstock improve this process by applying machine learning to your sales data. These tools identify patterns like seasonality, growth, and promotion-driven spikes, allowing you to forecast demand on a weekly basis.

For example, imagine you sell a summer apparel item that sees sales triple between May and July. An AI model would anticipate this surge, increasing reorder points and order sizes as early as spring. Then, as the season winds down, the system would scale back orders. On the other hand, a product with consistent year-round demand - like a basic wardrobe staple - would maintain steady reorder rules with only minor adjustments for gradual growth.

Forstock’s AI-powered forecasts generate 12-month demand plans, recommending reorder points and quantities for each SKU and location. These plans account for factors like safety stock and supplier minimums. Sophie, an e-commerce manager, shared her experience:

"Before Forstock, I was literally living in spreadsheets. I spent hours each week updating stock levels and trying not to miss reorder points. Since switching, I haven't had a single stockout, and I don't overorder anymore. The AI forecast actually makes sense for my business. It feels like having a supply chain manager on my team."

To integrate AI forecasts into your workflows, configure your system to calculate order quantities and due dates. The platform can then create draft purchase orders for review on a central dashboard. For low-risk SKUs or smaller orders, you can set rules to auto-approve and send orders directly to suppliers. For larger orders or new products, manual approval allows you to factor in additional considerations like budget, cash flow, or upcoming marketing campaigns.

Finally, monitor key performance metrics to ensure your reorder rules and forecasts are working effectively. Metrics like stockout rate, inventory turnover, fill rate, excess inventory value, and forecast accuracy can highlight areas for improvement. For instance, frequent stockouts or rush shipments might mean you need more safety stock or shorter review cycles. Conversely, overstock or slow-moving inventory could signal a need to tighten reorder points or adjust AI recommendations.

Liam, an operations director, summed it up:

"The forecasts are accurate, the purchase order flow is seamless, and my team actually enjoys using it. We have cut manual inventory tasks by at least 60%."

Building Automated Supplier Order Workflows

After setting up reorder points and forecasting logic, the next step is creating workflows that automatically generate and send purchase orders to suppliers - no manual drafting required. These workflows should start with a clear trigger, like when on-hand inventory combined with incoming purchase orders falls below a reorder point for a specific SKU. From there, the process should automate actions such as drafting purchase orders, calculating quantities, and sending them to suppliers.

The goal is to create a reliable, hands-off system that identifies low stock, formats orders in USD (using MM/DD/YYYY for dates), and dispatches them via email or API. It should also handle exceptions, like supplier capacity limits or minimum order requirements, without disrupting the workflow.

Setting Up Automatic Purchase Order Creation

To get started, configure a system that syncs directly with Shopify. This setup pulls real-time data - like product details, stock levels, sales trends, and supplier information - to determine order triggers, select suppliers, and calculate quantities.

Each automated purchase order should include key details such as the SKU, variant, product name, ordered quantity, unit cost (in USD), line totals, applicable taxes, shipping costs, and the overall total. Use U.S. number formatting (e.g., $1,250.75) and MM/DD/YYYY for dates to ensure clarity with suppliers. Additionally, include supplier-specific details like lead times, minimum order quantities, preferred currency (converted to or displayed alongside USD), and shipping addresses. Automating these fields reduces manual effort and minimizes errors in pricing or formatting.

When working with multiple suppliers, prioritize based on factors like reliability, landed cost, lead time, and minimum order quantities. For instance, the system could first attempt to place an order with the supplier offering the lowest landed cost and meeting the desired delivery date. If that supplier is unavailable or cannot meet the timeline, the workflow can automatically switch to a backup vendor. This ensures orders are cost-efficient and timely.

Platforms like Forstock streamline this entire process for Shopify brands. By syncing inventory and supplier data, Forstock uses AI-driven demand forecasting to recommend order quantities that account for expected sales and safety stock. It can automatically generate purchase orders when products hit reorder points, offering a solution tailored to U.S. demand patterns and seasonal spikes, such as Black Friday or Memorial Day.

Daniel, a Supply Chain Manager, shared his experience with Forstock:

"With Forstock, we can create POs in minutes, track supplier performance, and forecast demand without the guesswork. It is the first tool that actually bridges inventory management and purchasing instead of forcing us to hack things together."

To set up an automated purchase order system, install an inventory or purchasing app that integrates with Shopify. Configure triggers, such as "when available inventory plus incoming POs falls below the reorder point", and map these triggers to actions like "create draft purchase order", "approve after review", or "send to supplier automatically." Test the workflow with a small set of SKUs and suppliers to ensure purchase orders are correctly formatted and reliably delivered via email, EDI, or supplier portals.

Each purchase order should include all critical details - supplier and merchant addresses, order numbers, dates, pricing, and product specifics - to avoid back-and-forth communication. For smaller orders or low-risk SKUs, you can set rules to auto-approve and send orders directly. For larger or high-value orders, manual approval allows for additional oversight, factoring in budget, cash flow, or upcoming marketing campaigns. With automated purchase orders in place, the next step is centralizing supplier communications.

Managing Supplier Communication in One Place

After automating purchase order creation, managing supplier interactions becomes essential to maintaining smooth operations. Once purchase orders are sent, keeping track of confirmations, shipments, and delivery timelines is critical. A centralized platform can simplify this process by consolidating all supplier communications into a single dashboard, providing a clear view of every purchase order's status.

Such a platform should display all purchase orders with status indicators like "draft", "sent", "confirmed", "in transit", and "received." It should also store message histories, shipment tracking details, and documents like invoices and packing slips. This eliminates the need to juggle emails and spreadsheets, allowing your team to track supplier interactions effortlessly.

Forstock offers a unified dashboard that consolidates supplier communication. Once a purchase order is sent, the platform logs supplier acknowledgments, expected ship dates, and tracking numbers into a centralized timeline for each order. Automated reminders can notify suppliers about overdue confirmations or shipments, while Shopify alerts you if key milestones are missed. This reduces manual follow-ups and improves on-time delivery rates.

This approach is particularly effective when managing multiple suppliers or high-volume SKUs. Instead of switching between emails, spreadsheets, and Shopify admin, you can monitor the status of every purchase order, identify reliable suppliers, and quickly address delays or issues.

To make centralized communication as effective as possible, maintain an up-to-date supplier directory with contact details, lead times, minimum order quantities, and payment terms. Use standardized email templates for purchase orders and follow-ups to ensure consistency. Log all supplier responses, confirmations, and updates directly into the platform so your team has access to the same information.

The workflow should also include alerts for specific events, such as a supplier failing to confirm an order within a set timeframe, shipment ETAs slipping beyond acceptable limits, or invoiced costs exceeding expected prices. When these exceptions arise, the system can flag the purchase order, pause further automated orders to that supplier, or prompt you to switch to an alternate vendor. This ensures you can adapt quickly and maintain a reliable supply chain.

Tracking and Improving Your Automation

Once your workflows are up and running, it's essential to keep an eye on their performance and make adjustments as needed. Automation isn't a "set it and forget it" process - it requires regular monitoring to ensure that your reorder points, safety stock levels, and supplier relationships stay aligned with your business goals.

By consistently reviewing your automated workflows, you can ensure they adapt to changes in sales patterns, supplier reliability, and seasonal demand. Set up a regular review schedule - monthly at the very least, or after major sales events like Black Friday or Memorial Day. This allows you to analyze performance data, spot trends, and tweak your rules to keep your system dynamic and responsive.

Metrics to Monitor After Automation

To fine-tune your automation, focus on tracking key performance metrics. These indicators will help you evaluate the effectiveness of your workflows and identify areas for improvement:

Stockout Frequency: If you’re running out of stock often, it could mean your reorder points are too low or your safety stock isn’t sufficient to handle spikes in demand.
Excess Inventory Value: Keeping too much inventory ties up cash unnecessarily. Automation can help reduce these costs by as much as 20–30%.
Lead Time Accuracy: Check how closely supplier delivery times match your expectations. If a supplier typically delivers in 18 days but your system assumes 14, your reorder points may trigger too late, leading to stockouts.
Order Fulfillment Rate: Monitor the percentage of customer orders fulfilled on time. If this rate drops, it could be a sign that your reorder rules need adjustments.

Forstock provides a real-time dashboard that consolidates these metrics, giving you a clear picture of inventory health, stockouts, overstocking, and supplier performance. Emily, an Inventory Manager, highlights its value:

"I open the dashboard in the morning and instantly know what needs reordering, what is overstocked, and what to focus on."

Additional metrics like inventory turnover and stock value can also provide insights. Inventory turnover shows how quickly products are selling and being replaced, while stock value gives you a snapshot of your inventory's total monetary worth.

Don’t forget to evaluate supplier performance. Track on-time delivery rates, order accuracy, and communication responsiveness. If a supplier consistently falls short, it might be time to adjust their lead times or revisit your supplier strategy.

Finally, monitor demand forecast accuracy. This helps you gauge how well your AI-powered forecasting aligns with actual sales. If the forecasts consistently miss the mark, consider tweaking how the model accounts for seasonality, sales trends, or promotional events.

Refining Rules Based on Results

Once you've gathered data, use it to refine your automation settings and triggers. Start with reorder points. If frequent stockouts occur for specific SKUs, adjust the reorder point upward. For instance, if a product runs out when the reorder point is set at 50 units, try increasing it to 75 and see if the issue improves.

On the flip side, if excess inventory is piling up, raising reorder points can delay new orders and help prevent overstock situations. The goal is to strike a balance where stock is replenished just in time without creating surpluses.

Safety stock levels also need regular evaluation. If you’re experiencing stockouts during high-demand periods like holiday sales, increase safety stock to provide a buffer. Conversely, if you’re consistently holding more safety stock than needed for stable-demand products, scaling back could save money and free up space.

Lead times are another critical factor. If suppliers consistently deliver earlier or later than expected, update their lead times in your system. For example, if a supplier's lead time is set to 14 days but deliveries usually take 18, adjust the lead time accordingly and recalculate your reorder points.

Forstock simplifies these adjustments with AI-driven recommendations based on real-time data. The platform analyzes inventory turnover, supplier reliability, and demand patterns to suggest optimal reorder points and safety stock levels.

Document any changes you make and review their impact during the next cycle. For example, if you increase the safety stock for a high-demand item from 50 to 75 units, track whether this reduces stockouts without creating excess inventory. If the adjustment works, apply similar changes to other products. If not, revert to the original setting and try something else.

It’s also a good idea to routinely review your supplier directory. Make sure details like contact information, lead times, minimum order quantities, and payment terms are accurate. If a supplier’s performance declines, adjust their lead times or reconsider your relationship with them.

Forstock’s centralized dashboard helps you track these changes and their results. Liam, an Operations Director, shares his experience:

"The forecasts are accurate, the purchase order flow is seamless, and my team actually enjoys using it. We have cut manual inventory tasks by at least 60%."

Automation isn’t a one-and-done solution - it’s an ongoing process. By continuously analyzing performance, spotting trends, and making data-driven adjustments, you can reduce stockouts, minimize excess inventory, and create a more efficient supply chain.

Conclusion

Automating supplier orders on Shopify isn’t just about saving time - it’s about creating a system that can grow with your business while cutting down on manual tasks. By following the steps in this guide, you can shift your purchasing process from being reactive and error-prone to one that’s proactive and driven by data.

Start by organizing your product catalog and supplier information, then move on to defining reorder rules, enabling demand forecasting, and automating purchase orders. These steps help you streamline operations and transition to a more efficient system.

Once automation is in place, the advantages become clear. Merchants who adopt these workflows often experience fewer stockouts on fast-moving products, less cash tied up in excess inventory, and faster purchase order cycles. Plus, you’ll free up valuable time to focus on growing your business.

Automation doesn’t mean losing control. You can set approval thresholds for large purchase orders, create exception rules for new or high-risk suppliers, and decide which products or locations to automate first. Tools like Forstock allow you to customize workflows, review suggested orders before finalizing them, and expand automation gradually as you gain confidence in the system.

As your business scales, keep an eye on key metrics like stockout rates for bestsellers, inventory turnover, average days of stock on hand, and the frequency of emergency purchase orders. Use this data to fine-tune reorder points, adjust safety stock levels, and prioritize suppliers. Remember, successful automation isn’t a one-and-done task - it’s an evolving process informed by data.

If you’re unsure about diving in, start small. Test automation with your top 20 SKUs or a single supplier to see how it works. As you see the results, you can expand to more products and locations. The effort you invest now in improving your purchasing processes will pay off as your business grows and order volumes increase.

Take a close look at your current supplier ordering process, pinpoint a few recurring issues, and try out an automation tool that integrates seamlessly with Shopify. By refining these processes, you’ll build a supply chain that’s flexible, efficient, and ready to support your growth.

FAQs

How can I organize my product and supplier data before automating orders in Shopify?

Before diving into automating supplier orders in Shopify, it's crucial to have your product and supplier information in order. Start by double-checking your product catalog - make sure all SKUs, descriptions, and inventory levels are accurate and up to date. On the supplier side, confirm that details like contact information, lead times, and minimum order quantities are clearly recorded and easy to access.

Having well-organized data is the backbone of any successful automation process. Take advantage of Shopify’s product management tools or integrated platforms to keep everything centralized. When your data is clean and consistent, workflows like purchase orders and stock level updates will run smoothly, minimizing errors and saving you time.

How does AI-powered demand forecasting improve supplier order automation compared to traditional methods?

AI-driven demand forecasting takes inventory planning to the next level by delivering sharper and more adaptable insights. It examines sales trends, lead times, and seasonal shifts to provide a clearer picture of demand. Unlike older methods that depend on fixed data or manual number crunching, AI adjusts in real-time, allowing you to respond quickly and make informed purchasing choices.

With this technology, you can cut down on stockouts, avoid excess inventory, and better match your stock to what your customers actually want. Plus, by automating repetitive tasks and boosting forecasting precision, AI tools not only save you time but also help improve cash flow management.

How can I keep my automated supplier order workflows effective as my business grows?

To keep your automated workflows running smoothly as your business grows, it's essential to keep an eye on critical metrics like inventory levels, supplier performance, and open purchase orders. Using a centralized dashboard can give you real-time updates on stock turnover, making it easier to spot which products are flying off the shelves and which ones are moving slowly.

AI-powered forecasting tools can be a game-changer here. They help you stay on top of shifting sales trends, seasonal fluctuations, and changing lead times. This way, your purchasing decisions remain grounded in data and aligned with actual demand. Regularly reviewing and fine-tuning these workflows ensures you're ready to tackle growth challenges while keeping operations seamless.