General Concepts

In order to avoid confusion with the classic stock management feature from version 1.4 of PrestaShop and see the possibilities offered by the advanced management feature introduced with version 1.5, you should picture two distinct concepts: product quantity available for sale, and physical products.

Product quantity available for sale

This is the same as the stock management feature from PrestaShop 1.4.x. It is the product quantity that is displayed in the shop for each product and product combination. This is the quantity that defines whether the product can be ordered or not (unless the “Allow ordering of out-of-stock products” option is enabled). That quantity can be manually changed for each product and product combination.

Since PrestaShop 1.5.x, that quantity can be automatically set according to the physical stock of the affected product. In a multistore scenario, the quantity is to be defined for each shop.

Consequently, what used to be called “stock” in PrestaShop 1.4.x is called “quantity of product available for sale” since PrestaShop 1.5.x.

Product stocks (physically stored)

This is the physical management of the stored products from a warehouse (or more). This is the new concept introduced as “stock” in PrestaShop 1.5.x.

This new stock management feature includes stock movement, stock valuation, stock transfer between warehouses, integration in the multistore feature and supply order management.

It also makes it possible to take into account the notion of actual stock. At a given time, a product can be available as a physical stock, but not available for sale because some client orders are still waiting for shipping. That same product can also have a supply order in progress, and thus not yet accounted for in the physical stock.

Real stock is therefore made of stock that is physically available in a warehouse, to which we add the quantity presently ordered from suppliers, and from which we subtract the quantity presently ordered by clients and which have not yet been shipped.

Using the new stock management feature

Do I have to use the new stock management feature?

There is no obligation to use the new stock management feature, just as there is no obligation to use the “quantity available for sale” management feature.

To activate both the “quantity available for sale” management feature and the stock management feature, go to the “Products” preference page, scroll down to the “Products stock” section, and choose “Yes” for the two stock management options. You have to first enable basic stock management in order to enable advanced stock management.

I do not want to change anything to my settings in PrestaShop 1.4.x/15.x. What should I do?

If you would rather not use the new advanced stock management feature from PrestaShop 1.5, and simply are satisfied with the “classic” way that PrestaShop handles product quantity management, you just have to enable the old-style stock management manager, and not the advanced stock management feature: go to the “Products” preference page, scroll down to the “Products stock” section, and choose “Yes” for the “Enable stock management” option, leaving the “Enable advanced stock management” option set to “No”.

The “available for sale quantity” management feature is now centralized in the “Quantities” tab from the product sheet: create a new product or edit an existing one, and the “Quantities” tab is available on the left, among the other tabs.

Does the new stock management feature apply to my needs?

The new stock management feature enables you to manage a stock of products. This feature applies to your business if:

• You manage a stock of products which you sell on your shop(s).
• You use at least one storage place (warehouse) which you manage yourself.
• You order most or all of your products to one or more suppliers.
• You need statistics about the state of your stock and of your warehouse(s).

This feature does not apply to your business if:

• You do not manage your stock of products yourself.
• You already use a stock management system/tool/program that you are satisfied with, and you wish to keep using it without changing anything.

Stock Management Rules

Stock Management Rules

In this section, we will explain the management rules that are automatically applied to stock management.

Each stock entry and exit must be valued. That is why each unit product stock must be associated with a tax-excluded unit price (either purchase price or production cost), whether through supplier order, or manual entry. Each product exit must also be valued.

There are three main valuation methods that you can choose, depending on your business activity or on the tax laws of each warehouse’s country or origin:

• FIFO (first in, first out).
• LIFO (last in, first out).
• AVCO (Average Cost, or Weighted Average Cost per Unit).

With the FIFO and LIFO methods, each unit product from the stock has a purchase price that has been fixed when it entered the stock. This way, for a given reference available in 100 units, 40 units can have a purchase price of X, and 60 can have a purchase price of Y. When an order is made, and depending on the chosen method, you know which product to use and with which purchase price, which enables you to precisely manage a potential order return and put the products back into stock with their original purchase price.

The table below gives you an example of the FIFO method of stock valuation. In this example, you have a two-input table (price and quantity per type of stock movement). You add more columns as we receive new products with new prices.

The stock value during the instant state in this case is 6,900.

The table below illustrates how the LIFO method can be used to value stock. We use the same entry and exit values as in the previous example. The principle remains the same as in the FIFO example, except that during exits, we primarily use the units that were the last to be entered in the stock.

The stock value during the instant state in this case is of 6,700.

The third most frequently used method for stock valuation is Weighted Average Cost (AVCO). The AVCO calculation is done after each new entry in the stock.

For a given product, the AVCO calculation is done using this formula:

With:

• QS = Quantity of products currently in stock, or initial stock.
• QA = Quantity of products to be added to stock.
• UP = Unit Price (tax-excluded purchase price, or production cost).

The table below illustrates the evolution of the AVCO with the example of a product initially with 20 units in stock, and purchased at a price of 2. The new entry/exit will be valued as follows:

*: Calculation details: ((8 remaining product in stock * 2) + (20 products to add * 3.4)) / 28 total products = 3.

At the Y date, we calculated the AVCO according to the number of products added in the stock their unit prices. Therefore, all products in stock now have a reassigned unit value, which depends on the new AVCO.