What is Webhook?

A webhook is an event-driven communication mechanism that allows one application to send real-time data to another application automatically when a specific event occurs. Unlike traditional API integrations where one system must repeatedly poll another to check for new data, webhooks operate on a push model — the source application proactively sends an HTTP POST request containing event data to a pre-configured URL (the webhook endpoint) the instant the event happens. This push-based architecture eliminates the latency and inefficiency of polling, enabling near-instantaneous data transfer between systems. Webhooks are foundational to modern e-commerce operations, powering real-time order notifications, inventory updates, shipping status changes, payment confirmations, and countless other automated workflows that keep multichannel businesses running smoothly.

Why It Matters

In the fast-paced world of e-commerce and order fulfillment, timing matters enormously. When a customer places an order, they expect immediate confirmation. When inventory runs low, the purchasing team needs to know right away. When a shipment is delivered, the customer should receive a notification within minutes. These real-time interactions depend on systems that communicate instantly, and webhooks are the mechanism that makes instant communication possible.

The alternative to webhooks is polling — having one system repeatedly send API requests to another at fixed intervals to check whether anything has changed. Polling is inherently inefficient for several reasons. First, most polling requests return no new data, wasting computing resources and API rate limits on empty checks. A system polling every 30 seconds makes 2,880 requests per day, the vast majority of which return nothing new. Second, polling introduces latency equal to the polling interval. If the system polls every 5 minutes, an event that occurs immediately after a poll will not be detected for nearly 5 minutes. Third, polling does not scale well — as the number of monitored events and connected systems grows, the volume of polling requests multiplies, consuming bandwidth, API quotas, and server resources.

Webhooks solve all of these problems. They transmit data only when something actually happens, consuming zero resources during idle periods. They deliver data within seconds of the triggering event, enabling true real-time responsiveness. And they scale efficiently because the volume of webhook calls is proportional to the volume of actual events, not to arbitrary polling intervals. For a business processing thousands of orders per day across multiple channels, the difference between polling and webhooks can be the difference between a responsive, automated operation and a laggy, resource-intensive one.

Webhooks also enable event-driven architecture, a software design pattern where systems react to events as they occur rather than operating on scheduled batch processes. Event-driven architectures are more responsive, more scalable, and more resilient than batch-oriented designs, and webhooks are the most common mechanism for implementing event-driven communication between separate applications in an e-commerce technology stack.

How It Works

The webhook workflow involves three core components: the event source, the webhook payload, and the receiving endpoint. Here is how these components interact in practice:

• Registration: The receiving application registers a webhook with the source application by providing a URL (the endpoint) and specifying which events should trigger notifications. For example, a fulfillment system might register with a Shopify store to receive webhooks for the "order/created" event. This registration tells Shopify to send an HTTP request to the specified URL every time a new order is placed.
• Event trigger: When the specified event occurs in the source application — a new order is placed, a product is updated, a payment is captured — the source constructs a webhook payload containing the relevant event data. This payload is typically formatted as JSON and includes all the information the receiving system needs to process the event — order details, product data, customer information, timestamps, and any other relevant fields.
• HTTP delivery: The source application sends an HTTP POST request to the registered endpoint URL with the event payload in the request body. The request typically includes headers that identify the event type, provide a unique delivery ID for deduplication, and include a signature or HMAC hash that the receiver can use to verify the authenticity of the payload and ensure it was not tampered with during transmission.
• Processing and response: The receiving application processes the incoming webhook payload — creating an order record, updating inventory, triggering a fulfillment workflow, or performing whatever action the event requires. It then responds with an HTTP status code (typically 200 OK) to acknowledge successful receipt. If the receiving endpoint fails to respond or returns an error status, most webhook providers implement retry logic, resending the payload at increasing intervals until it is acknowledged or a maximum retry count is reached.
• Security and verification: Because webhook endpoints are publicly accessible URLs, they must be secured against unauthorized or malicious requests. The standard security mechanism is HMAC signature verification — the source application signs the payload using a shared secret key, and the receiving application recalculates the signature and compares it to the one provided in the request header. If the signatures match, the payload is authentic. Additional security measures include IP allowlisting, SSL/TLS encryption, and payload validation against expected schemas.

Common Webhook Use Cases

In e-commerce operations, webhooks power critical workflows including real-time order forwarding from sales channels to fulfillment systems, instant inventory updates when stock levels change, shipping notification triggers when carriers provide tracking updates, payment confirmation events that release orders for processing, customer account creation events that trigger welcome sequences, and price or product update synchronization across multiple platforms. Each of these use cases benefits from the immediacy and efficiency that webhooks provide compared to batch processing or polling alternatives.

How Nventory Helps

Nventory supports both incoming and outgoing webhooks, making it a central hub for real-time event communication across your entire technology stack. Incoming webhooks from your sales channels, payment processors, and shipping carriers trigger automated workflows in Nventory — processing orders, updating inventory, and synchronizing data the instant events occur. Outgoing webhooks from Nventory notify your connected systems when inventory levels change, orders are fulfilled, or any other significant event occurs, ensuring that every system in your stack stays current in real time. A built-in webhook management dashboard lets you configure endpoints, monitor delivery status, inspect payloads, troubleshoot failures, and review retry history, giving you full visibility and control over the real-time data flows that power your operation.