Shopify Purchase Orders Explained: A Step-by-Step Guide for Efficient Order Management

Keeping inventory in sync with demand is key to success. One of the tools Shopify offers (especially for merchants dealing with wholesale, bulk orders, or multi-location fulfillment) is Shopify purchase orders. However, many Shopify store owners still rely on spreadsheets or manual messaging with suppliers, which causes errors, miscommunication, and inefficient work.

This blog will explain how to leverage the Shopify PO system for maximum financial accuracy, stronger supplier relationships, and seamless Shopify order management. As a result, you can run your store with confidence and precision. Right now, keep scrolling to discover more with us!

Understand Shopify Purchase Order Management

What is a purchase order (PO)?

A purchase order (PO) is a formal document your business issues to a supplier that details what you want to buy, how many units, at what price, and when/where it should be delivered. In fact, Shopify purchase orders let you capture and monitor your incoming Shopify inventory, so you can know what’s “on the way” and what has actually landed for strict operational control. 

How the Shopify PO system works

Who issues Shopify purchase orders?

The buyer is often responsible for creating and sending Shopify purchase orders to suppliers. Based on your store’s size and structure, POs can be issued by different teams or departments. Large businesses often have dedicated finance, procurement, and accounts payable employees controlling this step. Small businesses, on the other hand, have the store owners handle PO. 

Small businesses’ owners are often responsible for creating Shopify purchase orders. 

Let’s take a look at an example: If you’re ordering new inventory for your retail or online store, it’s your role to issue the Shopify customer purchase order. But if you’re fulfilling products on behalf of another business, then that business will be the buyer and is responsible for the PO. 

Apparently, we can clearly see the difference between issuing POs for your own store and fulfilling POs for another buyer, reducing confusion and keeping your workflow more accurate.   

Learn more: 26 Creative Social Media Ideas For Small Businesses To Grow

Who approves Shopify purchase orders? 

The vendor, whether it’s a manufacturer, wholesaler, or supplier, is responsible for approving Shopify purchase orders once they’ve been issued. Specifically, they’ll review and confirm the details before processing your request, making your Shopify POs a legally binding agreement.

As a result, you, as the buyer, are officially committed to paying for the goods or materials listed in the PO according to the agreed terms. And proper approval ensures clarity and accountability. 

Vendors are responsible for reviewing the relevant details and approving Shopify POs

Learn more: 

• How to Find a Manufacturer for Your eCommerce Business

• The Best Wholesale Clothing Vendors And How To Source Quality Products

Status of Shopify order management

The status of a PO clearly defines its position in the Shopify order fulfillment process, including: 

1. Draft: The PO is being created and edited, but has not yet been sent to the supplier. It has no effect on your inventory tracking and is commonly called a Shopify draft order.

2. Ordered: The Shopify PO has been finalized, sent to the supplier, and confirmed. The quantity of items on the PO is now counted as "Incoming" inventory in your online store.

3. Partial: Some, but not all, items in the PO have been received. 

4. Received: All items have been received and added to stock.

5. Closed: The PO is done, and no further changes are allowed.

Key features of the Shopify Order Processing Workflow

To get the most value out of Shopify purchase orders, you need to understand the core features. These capabilities are not about order tracking; they cover extensive functionalities, such as: 

• Supplier management

You can store and manage essential supplier details such as company information, payment terms, and SKU codes. This ensures every Shopify PO is accurately tied to the correct supplier.

• Multi-location support

Shopify allows you to assign destinations for each PO, whether it’s a warehouse, retail store, or fulfillment center. This is useful for brands managing multiple locations or regional inventories.

• Cost adjustments

You can add costs (e.g., Shopify shipping fees and insurance) to your PO’s cost summary. This ensures your landed cost reflects the actual price, supporting more accurate profit calculations.

• Export to PDF

You can export your PO as a PDF file to share with suppliers. This creates a professional and standardized Shopify order invoice template, ensuring consistency in your purchasing records.

• Partial receiving and rejection

The system offers line-level control, allowing you to mark items as partially received, accepted, or rejected. This prevents overstocking and ensures your order management data is accurate.

• Reporting and analytics 

Tracking key metrics such as “ordered but not received” quantities, supplier performance, and cost breakdowns empowers better purchasing decisions in your order processing workflow. Moreover, Shopify’s Stocky app can enhance forecasting capabilities. It will suggest purchase orders based on minimum and maximum stock thresholds, helping minimize excess inventory. 

Learn more: GemPages x Tracktor Order Tracking: Third-Party Integration

What To Consider When Creating Shopify Purchase Orders

If you want to create the first official Shopify purchase orders, don’t forget to take a look at the three essential prerequisites and configure them precisely in your Shopify Admin Dashboard. 

1. Set up suppliers

Every Shopify purchase order must be tied to a supplier profile. This helps you ensure that each order you create includes consistent, accurate supplier information and reduces costly reworks. 

• Supplier name: The legal or trade name of your vendor.

• Primary contact person: The person you’ll communicate with regarding the PO.

• Email address: This is for sending and receiving official POs or invoices.

• Physical address: Where correspondence or returned shipments might be sent.

You can have these details before or create them at the same time you make a purchase order. Remember that every supplier profile you add will be kept in your Shopify Admin, and you can reuse it for future transactions. This is key to managing all of your Shopify bulk purchase orders.

2. Configure specific locations for inventory

Next, define where your inventory should go once it’s received. Shopify allows you to assign a destination to each Shopify PO—this could be a warehouse, retail location, or fulfillment center.

By configuring locations in your Admin Dashboard, you can direct Shopify to track products separately across multiple sites. For example, if your store operates from both an online warehouse and a physical boutique, you can assign purchase orders to each based on demand.

3. Activate inventory tracking 

Enabling Shopify inventory tracking for your products is especially essential. This ensures that your Shopify POs automatically update your stock levels when goods ordered are received. In other words, without tracking turned on, Shopify won’t know when items arrive or where they belong, leading to stock inaccuracies and delayed fulfillment. To activate it, let’s follow the steps: 

1. Go to Products > Inventory in your Shopify Admin Dashboard.

2. Select the product(s) you want to track.

3. Enable “Track quantity” and set a reorder point to alert you when stock runs low.

A Step-by-Step Guide To Work With Shopify Purchase Orders

1. How to create a purchase order

Step 1: Select the supplier and destination for the order

In your Shopify Admin, click Products > Purchase Orders > Create Purchase Order. 

Click Create purchase order under the tab Purchase Orders in the Shopify Admin

In the Supplier Section, click Select supplier and Create New Supplier to fill out the details and click the Save button. After that, select a target supplier for this Shopify purchase order. 

Create new suppliers for Shopify purchase orders and select a proper option later

You can also configure optional fields to set the supplier payment terms and currency:  

• Cash on delivery

• Payment on receipt

• Payment in advance

• Net 7, 15, 30, 45, or 60. 

Configure the payment terms and currency with your Shopify purchase order

Finally, select Shop Location in the Destination to finish the first step.

Step 2: Configure the details (shipment, products, additional sections)

• Shipment details

In the Shipment details section, you need to configure the fields: Estimated arrival, Tracking Number, and Shipping carrier (often selected based on the tracking number or do it manually). 

Fill out the shipping details for estimated arrival, shipping carrier and tracking number

• Products

In the Add products section, select the target products and variants (Quantity, Supplier’s SKU, Individual product cost, and Any tax percentages), and click the Add button to complete. 

Fill out the Add products details with supplier SKU, quantity, cost, and tax

• Additional details

In the Additional details section, you can expand your requirements with your supplier by using: a reference number, a note to the supplier, and any tags for the Shopify purchase order. 

Fill out the Additional details as an extensive requirement for your Shopify PO

Step 3: Review and save the Shopify draft order

In the Cost summary section, review your order or click Manage to add cost adjustments (e.g., customs duties, fees, insurance). Then, click Save as draft for the Shopify draft order. 

Review the cost summary of your Shopify PO before saving as a draft

After that, you can export your Shopify PO draft and submit it to your supplier for review. 

Export the Shopify draft order under PDF to send to your supplier

Once both confirm this Shopify purchase order, click Mark as ordered to create an official order. 

Click the Mark as ordered button to confirm an official order with the supplier

2. How to edit a purchase order

In your Shopify Admin, click Products and select Purchase orders. 

Then, select the target Shopify PO type to edit: Draft, Ordered, Partial, Received, and Closed. 

Select the type of Shopify PO that you want to edit 

Next, select the “More actions” button and click the Edit option. 

Click Edit in the drop-down from the More actions button to make changes

After that, make your changes and click Save. 

3. How to close a purchase order

Our following guide is tailored to any Shopify wholesale purchase order as ordered before.

In the Purchase Orders tab, click the Shopify PO that you don’t want to continue processing. 

Select a target PO that was previously marked as an order for closure requirement

In your purchase order tab, click the “More actions” button and select Close purchase order. 

Click Close purchase order in the More actions drop-down to make closure

4. How to delete a purchase order

Deleting a PO is only valid when you have a Shopify draft order that is not marked as an order.

To delete a Shopify purchase order, select it to open its order tab. 

Then, click the “More actions” button and select Delete. 

Click Delete for the Shopify POs that are not yet confirmed with “Mark as ordered”

Best Tips for Shopify Customer Purchase Order Management

#1. Standardize your Shopify PO process

Let’s create reusable templates for all your Shopify purchase orders so that every buyer or team member captures the essential details: SKUs, cost, supplier info, and expected delivery dates.

Undoubtedly, standardization ensures that nothing slips through the cracks during the Shopify order processing workflow. It also speeds up purchase approvals and minimizes errors that come from manual data entry. For larger stores, setting up custom templates or integrating apps for automated Shopify order invoice templates can save hours and improve financial visibility.

#2. Establish a clear approval workflow in your Shopify Admin

You should set up dollar-based approval tiers in your Shopify Admin or use automation tools to create a defined sign-off hierarchy. This ensures that high-value orders go through finance or management review before submission, while your smaller POs can be approved automatically.

Additionally, implementing automated notifications and approval routing within your Shopify order automation system not only prevents unauthorized purchases (“shadow buying”) but also leaves a transparent audit trail. All of these are essential for compliance and budget tracking.

Learn more: GemPages Delivery Date: An Element to Leverage Shopify Store

#3. Track supplier performance regularly

The reliability of your suppliers directly affects your inventory accuracy and delivery timelines. Therefore, it’s recommended to use measurable KPIs, such as on-time delivery rate, lead time consistency, and defect or return rate, to find underperforming suppliers before issues escalate. 

#4. Maintain accurate records with automation 

Each missed manual update can lead to stock discrepancies, lost POs, or mismatched invoices. Instead, you should move to a centralized PO management system that syncs directly with your Shopify backend. Robust apps like Stocky automatically record supplier details, track received items, and sync updates across your sales channels, helping save hours of administrative work.

#5. Audit and refine your PO workflow if needed 

Your Shopify purchase order process isn’t “set and forget.” As your store scales, you need to review your workflows periodically to ensure they align with new product lines, fulfillment centers, or market demands. Don’t forget to conduct internal audits to identify bottlenecks, like slow approvals or inconsistent data entry, and use those insights to streamline your operations.

Conclusion

Mastering Shopify purchase orders is the cornerstone of efficient Shopify order management and sustainable growth. When configured correctly, the Shopify PO system gives merchants total control over inventory, supplier relationships, real-time analytics, and fulfillment accuracy. 

Once again, we want to say that investing time in optimizing your Shopify POs isn’t about better record-keeping; it’s also about building a more dynamic and data-driven eCommerce business. This is one of the emerging trends that you should consider to become a leader in your niche.

Read GemPages blogs for more insights about Shopify and adapt them to transform your store.

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