Inventory management is crucial, clothes can go out of season, out of style, trends can become irrelevant. You wouldn’t want to be stuck with dead stock. Thus if you have the right inventory management system in place, you wouldn’t over hoard on a style that is selling slowly. The more products you store the more storage space required. Warehouse costs are variable, thus if you keep the inventory organized, you can save up on space and money. Inventory management is also critical for cash flow management. Assume a scenario, where you know exactly how much inventory you have left, it helps you order new products accordingly, you will never lose out on sales.
Ways to manage inventory:
Setting minimum and maximum par values of Inventory is one such way to keep a check. Par levels are the minimum amount of products that you must keep on hand at all times. You will be notified as soon your products go below the minimum values. This might take some pre-planning, decision making, and prior research, but if you do invest time into this your ecommerce store will run like a well-oiled machine.
First in first out is a golden rule when it comes to inventory management. You may assume this holds true only for perishable items, however, even items like clothing could follow this system. Nobody wants to buy a worn-out , obsolete out of style clothing. Try to add new products through the back of the warehouse, so that the older ones get sold before.
Like any other business it is important to have good relationships in your online fashion business. Say you need to return a slow selling skirt, restock a bestselling pair of jeans, resolve manufacturing issues, or need extra storage space for a festive season sale. If you have a good relationship with your vendors,suppliers, manufacturers and warehouse owners, resolving issues like the above would be a cake walk.
Failing to plan is planning to fail. Assume a scenario where the sales of a pair of pants rises suddenly and you are under-stocked, a cash-flow issue poses as an issue to buy the latest style of skirts, the storage space is not enough to accommodate for the festive discount sale you had planned, an intern miscalculated your inventory and you have less stock of a particular style of shirts, your warehouse is full of stock that sells slowly, your manufacturer didn’t deliver on time or discontinued a particular product without prior notice. These are just some of the many things that you face in an ecommerce business, thus plan ahead and plan well.
Forecasting inventory needs accurately relative to demand is something that comes with experience. Try to factor the following aspects to do it flawlessly. Study the trends in the market, compare the sales of the current year with the same time last year, evaluate growth and sales based on agreements and subscriptions, keep in mind the overall state of the economy, promotions and advertising budget constraints.
I am the Founder at ILoveFashionRetail, where we design & develop e-commerce websites & mobile apps for fashion retailers. We also help fashion brands grow their online sales & traffic. My essays are featured at Forbes, Moz, Fairchild, FIT and more. Contact me.