If you sell actual products, you no doubt have inventory stock. Except in cases where you are having products drop-shipped from a distributor and have no means of monitoring inventory availability, you need to make sure you have enough inventory on hand to fulfill your orders. Furthermore, you may want to restrict customers' ability to order products that are out-of-stock — or, alternatively, allow customers to place backorders.
Magento has a host of configurations to help you establish your inventory rules and policies. Most can be overridden at the product level, too, giving you even more granular control over your product inventory needs.
Here, let's discuss some additional tools in Magento that can help you manage your inventory.
One of the inventory configurations, is that of Notify for Quantity Below. This value sets the threshold whereby Magento will send you an email notification if a product's inventory falls below this quantity. This notification will only come once each day for a given product. Using this feature can help you avoid running out of stock.
Under the Reports menu in your Magento backend are several reports under the Products section. Use these reports regularly to help you monitor your inventory movements and plan your stock purchases. Let's have a look at these reports in brief: