1. To setup a product inventory, select the item you want to track from Product -> Manage Inventory.

2. Click on the Create New Inventory Item.

Quantity On Hand

This is the quantity of the product that is available.

Quantity Reserved

The quantity currently reserved for shipping.

Alert When Below

The store will alert you in the front page if the quantity drops to the level set here.

Allow Backorders

Check this setting if you allow customer to continue order even when the stock has reached 0.