The Apparel Guide: Clothing Inventory Management

May 13,2021

FondMart Guidelines

Clothing inventory management has unique challenges in the fashion industry. When one business deals with trends and styles, going one step ahead of the demand curve is one of the most important capabilities to stay competitive.



man on the ladder picking up jeans from the shelf in the clothes shop



Importance of Inventory Management

What happens when you don’t have inventory management for your fashion business? The answer is a disaster. Even if you just run a small boutique, no inventory management would create huge chaos. For example, you could probably miss a potential life-time customer if you constantly have stock-outs and keep frustrating your customers.



The main purpose of carrying inventory is to provide customers with an expected level of product availability. Running out of stock on an item can have negative effects on your business both in the short and long term. With a good inventory management, you can achieve the followings:



  • Spot sales trends ahead of time and capitalize on them
  • Take advantage of seasonal fluctuations
  • Forecast what lies ahead and plan accordingly



Disadvantages of High Inventory Levels

A lot of companies try to prevent stock-outs with high level of inventory. After all, in this new area of the digital business world, your competitor is just one click away. Many business would want to avoid losing customers over stock-outs.

Having high inventory levels generally means:



  • High financial cost: High inventory sometimes equals  high risk. Carrying excess inventory has significant costs. One of the highest costs for many companies is financing the purchase and holding of inventory. When a company has a high level of inventory, it needs to face disadvantages relative to inventory that require more resource utilization to manage and make sales.
  • Difficult Strategic Planning: Management must figure out how to communicate with suppliers and improve ordering processes. This process makes it difficult to catch up with new trendy products.
  • Poor Turnover: Businesses need to turn over inventory efficiently to maintain reasonably high profit margins and to avoid the costs and other disadvantages that come with high levels of inventory.



Solutions to Inventory Management Challenges

Of course, it was never that easy to predict what consumers wanted. Still, it is important for us to find the best solutions to help us better manage inventories.



Digital strategies for apparel business

Pen-and-Paper method is mostly adopted by Small retailers. They may make a list of their items and take a count by hand. This may include dividing up a sheet into several categories and then adding subcategories for different styles. This process also involves using Microsoft Excel or Google Sheets to keep track of your inventory.



Using digital tools can be a great method to avoid counting errors and eliminates manual data entry. Mobile-based inventory management tools allow you to take pictures of your items, enter notes, upload the photo and information to the cloud and download inventory data in .CSV format. You can even develop a more sophisticated system using a barcode to identify your products and upload to your inventory management system.



Effective Inventory Replenishment Planning

Replenishment Planning determines the best balance between customer service levels and inventory. One of the best practice to lower your carrying costs is to effectively plan inventory replenishment. There are two things you can do:



  • Reducing the risk of variable supplier lead times. Understand seasonal delay and plan ahead. For example, Chinese New Year in the Far East, or summer shutdowns in Italy are annual events, often causing unnecessary interruptions to supply.
  • Build an accurate demand forecasting machine. Sophisticated forecasting tools that account for trends, seasonality, product life circle, etc.


How to improving stock availability but without carrying excess stock? FondMart might be the answers that you are looking for. Stock availability is actually an achievable goal. When FondMart choose its suppliers, the fulfillment is one important standard that is taken into considerations. We help you ensure the accuracy of the supply chain fulfillment. Thus, every customer can enjoy a 99% guarantee of stock availability.



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