Shopify Inventory States Explained: On Hand vs Available vs Committed

If you've ever looked at your Shopify inventory numbers and felt confused, you're not alone. Shopify doesn't just track one number per product — it tracks several, and they all mean something different. Understanding these states is the foundation of good inventory management, and getting them wrong leads to either ordering too much or running out of stock. These states flow through the entire inventory lifecycle from purchase order to reorder.

The Inventory States

Shopify breaks your inventory into distinct states. Here's what each one actually means:

On Hand

This is the total physical quantity at a location. Every unit that's physically in your warehouse, stockroom, or fulfillment center counts as "on hand" — regardless of whether it's already promised to a customer, reserved, or damaged. Think of it as the raw count of what's sitting on your shelves.

Available

This is the number that actually matters for selling. Available = On Hand minus everything that's spoken for (committed, reserved, damaged, in quality control). This is what a customer can actually buy. When your available stock hits zero, you're effectively out of stock even if your on-hand number still shows units — because those units are allocated elsewhere.

Committed

These are units attached to unfulfilled orders. A customer has paid, the order exists, but you haven't shipped it yet. The units are still physically in your warehouse (so they count as on hand), but they're not available for new sales.

This distinction matters more than most merchants realize. If you have 50 units on hand but 45 are committed, you only have 5 available to sell. If you're making reorder decisions based on the on-hand number, you'll think you have plenty of stock when you're actually almost out.

Incoming

Stock that's on its way to you. You've placed a purchase order with your supplier, the goods are in transit, but they haven't arrived and been received yet. Incoming inventory doesn't count as on hand or available — it's a future number. This is why understanding your lead time matters so much.

Incoming is useful for planning but dangerous for decision-making. "We have 200 incoming" feels reassuring, but if those units are 3 weeks away and your current available stock will run out in 5 days, you still have a problem.

Reserved

Units set aside for a specific purpose that aren't part of normal sales flow. This could be stock held for a wholesale order, a photoshoot, an upcoming promotion, or an exchange. Reserved units are on hand but not available.

Damaged

Units that are physically present but can't be sold. Maybe they arrived damaged from the supplier, got damaged in storage, or were returned in unsellable condition. These count toward on hand but not available. Regularly auditing your damaged inventory prevents your numbers from slowly drifting from reality.

Safety Stock

A buffer quantity you keep as insurance against unexpected demand spikes or supplier delays. Safety stock is on hand and technically available, but the idea is that you should reorder before you start eating into it. It's your emergency reserve.

Quality Control

Units that have been received but are being inspected before they're cleared for sale. Common in industries with strict quality requirements — cosmetics, supplements, electronics. These count as on hand but not available until they pass inspection.

Why This Matters for Reorder Decisions

The single biggest inventory mistake small merchants make is looking at the wrong number when deciding whether to reorder. If you check your Shopify admin and see "50 in stock," you might think you're fine. But which 50?

• 50 on hand with 40 committed = only 10 available
• 50 on hand with 5 damaged and 5 reserved = only 40 available
• 50 on hand with 50 available = you're actually fine

Your reorder decisions should always be based on available stock, not on hand. Available is what can actually be sold. Everything else is spoken for.

How Sensible Forecasting Handles This

Sensible Forecasting reads your available inventory directly from Shopify and uses that as the basis for all forecasting calculations. When it tells you "this product will run out in 12 days," that's based on your available stock and current sales velocity — not inflated by committed, reserved, or damaged units.

It also factors in your lead time and safety stock settings, so the reorder date it shows you accounts for how long your supplier takes to deliver and the buffer you want to maintain. You don't have to do the math yourself — just check the product table and see what needs ordering.