Shopify Inventory Value: How to Calculate, Report, and Automate [2025]

If you don’t know the true value of your inventory, you don’t really know how much cash is tied up in stock, how accurate your profit margins are, or what you actually owe in taxes.

When inventory value is miscalculated, profits can look healthier than they are, tax bills arrive higher than expected, and too much capital sits locked in products that aren’t moving.

For Shopify merchants managing multiple SKUs and locations, even small errors can snowball into major financial gaps.

We break down how to calculate Shopify inventory value correctly and the common mistakes that distort the numbers.

What is Shopify Inventory Value and Why It Matters

Shopify inventory value is the total cost of products you currently hold in stock. It’s based on purchase cost, not selling price, and updates as inventory moves in or out.

It matters because it directly affects the following

Cash flow: A high inventory value means more capital tied up in unsold goods
Taxes: Year-end inventory valuation (US GAAP: lower of cost or market, IFRS: lower of cost or net realizable value) changes taxable income.
Profitability: Misstated inventory values distort COGS and gross margins, making profits look stronger or weaker than they really are

In short, knowing your true inventory value in Shopify helps you manage working capital and measure taxes and profitability with confidence.

How Shopify Tracks and Reports Inventory Value

Shopify gives merchants built-in inventory reports that show how much stock is on hand and what it’s worth at cost.

These reports are mainly used for accounting, tax reporting, and identifying which products tie up the most working capital.

Below are key ones

Month-end inventory snapshot/value: Shows quantity and cost-based value of available inventory at month-end. Note that “available” excludes committed or incoming stock.
ABC analysis by product: Classifies SKUs into ABC tiers based on their recent revenue contribution (top 80%, next 15%, and bottom 5%). This helps prioritize restocks and clearance actions
Average inventory sold per day / Percent of inventory sold / Sell-through rate: Offer insights into sales velocity and inventory turnover
Days of inventory remaining: Projects how long current stock will last based on recent sales trends
Inventory adjustments: Log changes made via manual edits, app updates, inventory transfers, or order fulfillment

While these reports provide a baseline view, they also come with limitations that hinder businesses with more complex operations:

Shopify uses cost value entered manually for each product. It doesn’t account for landed costs like shipping, duties, or supplier discounts.
Most reports do not update in real-time, making trend analysis or timely tracking harder without manual exports
Although Shopify supports multiple locations, many inventory values aren’t consolidated automatically. Merchants often need third-party tools for accurate multi-location valuation.
No support for accounting methods like FIFO, LIFO, or weighted average cost of goods sold, which can be essential for accurate COGS and financial reporting

Shopify gives you a basic snapshot of your inventory value today, but it's limited to cost entries and lacks real-time data or full accounting compliance.

For growing merchants or those needing true landed cost accuracy, multi-location visibility, or standard accounting support (FIFO/LIFO), supplementing Shopify with advanced planning tools like Prediko or ERP systems is essential.

Methods for Calculating Shopify Inventory Value

Following are some of the main methods businesses use to calculate inventory value, along with how they apply in Shopify.

1. FIFO (First In, First Out)

FIFO assumes the oldest inventory is sold first, leaving the most recent purchases in ending stock. This method mirrors how goods physically move in most businesses and is especially important for perishables or fast-moving products.

Shopify doesn’t support FIFO natively, so merchants who need it for accounting or compliance usually depend on third-party integrations or external systems.

2. LIFO (Last In, First Out)

LIFO assigns the most recent inventory costs to sales first, leaving older costs in inventory. This method can lower taxable income during periods of rising prices, which is why some US companies use it.

It is accepted under US GAAP but not under IFRS. Shopify does not support LIFO, so it must be handled entirely through another software.

3. Weighted Average Cost

Weighted average spreads total costs evenly across all units, giving a consistent per-unit cost. It works well for businesses selling large volumes of interchangeable or bulk products where tracking individual purchase costs isn’t practical.

Shopify follows this approach by letting merchants assign a single cost field per product, making it the simplest method to use on the platform.

Which method fits your business best

FIFO: Reflects actual product flow; ideal for perishables and fast-moving goods
LIFO: Allowed only under US GAAP; mainly used for tax benefits during inflation
Weighted Average: Easiest to apply in Shopify; best for bulk or interchangeable products

Finding Your Shopify Inventory Value Step-by-Step

Calculating inventory value in Shopify requires pulling the right reports and exporting data when needed.

Here’s how to do it step by step.

Step 1: Access inventory reports

First, go to Analytics > Reports > Inventory

Here you’ll find reports like the valuation summary, month-end snapshot, and inventory quantity report.

Each one shows stock at cost, which forms the base for inventory valuation.

Step 2: Apply filters

Tailor the reports for accuracy. For example, when preparing month-end accounts, you might

Filter by product category to include only relevant SKUs.
Select a specific date (e.g., July 31) to match accounting records

This ensures your totals align with the reporting period and aren’t inflated by unrelated categories or dates.

Step 3: Export to CSV

Once filtered, click Export. The CSV exports are especially useful because

They can be archived for tax or audit purposes
Finance teams can cross-check numbers with accounting software
You can adjust data (e.g., add landed costs) outside Shopify

Unlike viewing reports in Shopify, CSVs give you the flexibility to preserve and manipulate inventory values.

Step 4: Combine multi-location data

If you operate multiple warehouses or POS locations, Shopify won’t automatically consolidate their inventory values. To get a true company-wide number

Export reports from each location
Merge them into a spreadsheet
Sum the totals for a consolidated value

This step avoids the risk of underreporting or double-counting across locations.

Common Mistakes to Avoid During Shopify Inventory Value Calculation

To keep your reporting accurate and your decisions reliable, it’s important to watch out for most common mistakes merchants make when calculating inventory value.

1. Ignoring damaged or obsolete stock

Inventory valuation must reflect the true value of stock on hand, not just the count. If obsolete or damaged goods remain included at full cost, the inventory value looks inflated, and gross margins are distorted.

A real-life example is Hasbro, which admitted it had over-purchased toys during the pandemic.

Much of that stock later became unsellable, and because it wasn’t written down quickly enough, the company’s reported performance didn’t match reality.

The result was a sharp revenue decline and a lawsuit from investors who argued the inventory had been overstated.

2. Using sales price instead of the cost price

Inventory valuation must always be based on the purchase cost, not retail price.

Mixing two leads to overstated assets and distorted margins. This mistake is common when merchants rely on retail-facing reports, which highlight selling price instead of cost.

For accounting purposes, always check that Shopify’s cost field is being used, not the price field.

3. Failing to reconcile multi-location data

When stock is split across warehouses or stores, Shopify reports will only show location-level values. If these aren’t consolidated, totals may be incomplete or double-counted.

A merchant running both online fulfillment and a POS store could easily end up with mismatched values unless exports from each location are merged.

Reconciliation ensures the company reports one accurate figure for inventory across the business.

Using apps such as Prediko to Automate Shopify Inventory Value Calculation

Prediko’s inventory planning and management app is built for Shopify merchants who need accurate and up-to-date inventory valuation without relying on manual exports or spreadsheets.

The app natively syncs with Shopify to track inventory across all products, variants, and locations, so that the valuation reflects current stock levels and costs without manual input.

The updates to your records are made in real time. As transactions occur, Prediko updates the inventory value in its centralized dashboard, showing total value of stock on hand across single or multiple stores.

Here’s a deep dive into how you can automate calculating Shopify Inventory Value with Prediko.

Automatic valuation across multiple stores: Pulls live data from every Shopify location and consolidates it, giving you a single, accurate company-wide figure without spreadsheets.

Real-time dashboard: Tracks inventory value at the SKU and category level, based on units in transit while aligning with current sales velocity and seasonality. Choose to exclude the in-transit inventory.

Advanced analytics and reports: Breaks down valuation by SKU, product type, or location. Provides historical trends so finance teams can see how much capital was tied up in inventory over time, not just today.

70+ 3PL and warehouse integrations: Connects directly with logistics partners so stock held outside Shopify is included in the valuation. Ensures landed costs, duties, and freight are reflected in the numbers, not ignored.

Prediko turns inventory value from a static report into a live financial metric, helping merchants reconcile faster, make better cash flow decisions, and avoid overstating or understating stock in the books.

Get Inventory Value Right, Every Time

Inventory value shapes cash flow, taxes, and profitability, but it’s easy to get wrong if you rely only on static reports or manual calculations.

Accurate valuation means knowing the true cost of your stock at any moment, across all locations.

Prediko gives you that visibility. It automates inventory valuation, consolidates data from warehouses and 3PLs, and updates dashboards in real time so you can see exactly how much working capital is tied up in stock and act on it immediately.

Start your 14-day free trial and see how Prediko makes Shopify inventory value clear, accurate, and always up to date.

FAQs

How to find inventory value on Shopify?

Go to Analytics > Reports > Inventory and open the valuation summary or month-end snapshot to see stock value at cost.

How do I export inventory value from Shopify?

Open any inventory report and click Export to download a CSV file that can be used for accounting or financial records.

How to see total inventory value?

If you manage a single location, the valuation summary in Shopify shows the total. For multiple locations, export each report and consolidate them manually or use a tool like Prediko for automated consolidation.

How do you determine the value of inventory?

Inventory value is calculated as cost × quantity of items on hand, adjusted for damaged, obsolete, or in-transit stock.