diff --git a/app/services/default_stock_location.rb b/app/services/default_stock_location.rb
new file mode 100644
index 0000000000..9269f17743
--- /dev/null
+++ b/app/services/default_stock_location.rb
@@ -0,0 +1,19 @@
+# Encapsulates the concept of default stock location that OFN has, as explained
+# in https://github.com/openfoodfoundation/openfoodnetwork/wiki/Spree-Upgrade%3A-Stock-locations
+class DefaultStockLocation
+  NAME = 'default'.freeze
+
+  def self.create!
+    country = Spree::Country.find_by_iso(ENV['DEFAULT_COUNTRY_CODE'])
+    state = country.states.first
+    Spree::StockLocation.create!(name: NAME, country_id: country.id, state_id: state.id)
+  end
+
+  def self.destroy_all
+    Spree::StockLocation.where(name: NAME).destroy_all
+  end
+
+  def self.find_or_create
+    Spree::StockLocation.find_or_create_by_name(NAME)
+  end
+end
diff --git a/db/migrate/20180906094641_add_uniqueness_of_variant_id_to_spree_stock_items.rb b/db/migrate/20180906094641_add_uniqueness_of_variant_id_to_spree_stock_items.rb
index bc7713f428..93b2853208 100644
--- a/db/migrate/20180906094641_add_uniqueness_of_variant_id_to_spree_stock_items.rb
+++ b/db/migrate/20180906094641_add_uniqueness_of_variant_id_to_spree_stock_items.rb
@@ -1,3 +1,6 @@
+# Since OFN has only a single default StockLocation, variants in OFN can only
+# have a stock item. By adding this unique index we constraint that at DB level
+# ensuring data integrity.
 class AddUniquenessOfVariantIdToSpreeStockItems < ActiveRecord::Migration
   def change
     add_index :spree_stock_items, :variant_id, unique: true
diff --git a/db/seeds.rb b/db/seeds.rb
index 17e5bf91b7..9f0868cb6b 100644
--- a/db/seeds.rb
+++ b/db/seeds.rb
@@ -50,3 +50,5 @@ end
 
 spree_user = Spree::User.first
 spree_user && spree_user.confirm!
+
+DefaultStockLocation.create!
diff --git a/spec/factories.rb b/spec/factories.rb
index 58273f7cb5..742f943ed7 100644
--- a/spec/factories.rb
+++ b/spec/factories.rb
@@ -657,7 +657,10 @@ end
 FactoryBot.modify do
   factory :stock_location, class: Spree::StockLocation do
     # keeps the test stock_location unique
-    initialize_with { Spree::StockLocation.find_or_create_by_name(name)}
+    initialize_with { DefaultStockLocation.find_or_create }
+
+    # Ensures the name attribute is not assigned after instantiating the default location
+    transient { name 'default' }
   end
 
   factory :shipment, class: Spree::Shipment do
diff --git a/spec/models/concerns/variant_stock_spec.rb b/spec/models/concerns/variant_stock_spec.rb
index 36fc33df24..2943b7575b 100644
--- a/spec/models/concerns/variant_stock_spec.rb
+++ b/spec/models/concerns/variant_stock_spec.rb
@@ -141,21 +141,6 @@ describe VariantStock do
   end
 
   describe '#on_demand=' do
-    context 'when the variant has multiple stock items' do
-      let(:variant) { create(:variant) }
-
-      before do
-        # Spree creates a stock_item for each variant when creating a stock
-        # location by means of #propagate_variant
-        create(:stock_location, name: 'location')
-        create(:stock_location, name: 'another location')
-      end
-
-      it 'raises' do
-        expect { variant.on_demand = true }.to raise_error(StandardError)
-      end
-    end
-
     context 'when the variant has a stock item' do
       let(:variant) { create(:variant, on_demand: true) }
 
diff --git a/spec/services/default_stock_location_spec.rb b/spec/services/default_stock_location_spec.rb
new file mode 100644
index 0000000000..8d91d7da83
--- /dev/null
+++ b/spec/services/default_stock_location_spec.rb
@@ -0,0 +1,65 @@
+require 'spec_helper'
+
+describe DefaultStockLocation do
+  describe '.create!' do
+    it "names the location 'OFN default'" do
+      stock_location = described_class.create!
+      expect(stock_location.name).to eq('default')
+    end
+
+    it 'sets the location in the default country' do
+      default_country = Spree::Country.find_by_iso(ENV['DEFAULT_COUNTRY_CODE'])
+      stock_location = described_class.create!
+      expect(stock_location.country).to eq(default_country)
+    end
+
+    it 'sets the first state in the country' do
+      default_country = Spree::Country.find_by_iso(ENV['DEFAULT_COUNTRY_CODE'])
+      stock_location = described_class.create!
+      expect(stock_location.state).to eq(default_country.states.first)
+    end
+  end
+
+  describe '.destroy_all' do
+    it "removes all stock locations named 'default'" do
+      create(:stock_location, name: 'default')
+
+      expect { described_class.destroy_all }
+        .to change { Spree::StockLocation.count }.to(0)
+    end
+  end
+
+  describe '.find_or_create' do
+    context 'when a location named default already exists' do
+      let!(:location) do
+        country = create(:country)
+        state = create(:state, country: country)
+        Spree::StockLocation.create!(
+          name: 'default',
+          country_id: country.id,
+          state_id: state.id
+        )
+      end
+
+      it 'returns the location' do
+        expect(described_class.find_or_create).to eq(location)
+      end
+
+      it 'does not create any other location' do
+        expect { described_class.find_or_create }.not_to change(Spree::StockLocation, :count)
+      end
+    end
+
+    context 'when a location named default does not exist' do
+      it 'returns the location' do
+        location = described_class.find_or_create
+        expect(location.name).to eq('default')
+      end
+
+      it 'does not create any other location' do
+        expect { described_class.find_or_create }
+          .to change(Spree::StockLocation, :count).from(0).to(1)
+      end
+    end
+  end
+end