Online store allows tracking inventory on product level. You can define a quantity for each product separately. Product quantity is automatically reduced when an item has been bought. When the quantity reaches zero, the product gets “Out of stock” status and can’t be ordered anymore. Online store administrator gets notified about it.
Product quantity can be set in Control panel → Catalog → Products → Product modify page → Stock Control block → Click “Manage” link.
or the “Unlimited” option can be selected. This option allows you to have this product always available for sale, as product quantity will never be decreased to 0 and, thus, will never be sold out. Unlimited quantity functionality usually is used for virtual products or services.
if you set product quantity, it will be automatically reduced after each purchase until it reaches zero. After that the product get “Out of stock” status and will not be available for sale. You can hide “Out of stock” products in your store using “Hide out of stock products” option in Control panel → Settings → General → Cart. If you would like these products to be shown in your store, but not available for sale, you should switch this option off. You can easily get the list of the “Out of stock” products using the the special “Availability” filter. You should go to Control panel → Catalog → Products page and choose “Enabled , but out of stock” option in it.
Sometimes you need to get notified when the stock is low, but has not reached zero yet. In order to set the value that will be treated as “low” you should use the “Send me a note when quantity reaches” input box. Just enter the needed value there.
If you want to track the inventory of each option selection (e.g. one t-shirt is available in different colors and you have 2 white, 3 black and 1 blue), you should use product variations.
“Low stock” and “Out of stock” notifications are sent to email specified in Control panel → Settings → Mail → Admin notifications → Send notifications to email field.