Apparel inventory management is a crucial aspect of running a successful clothing business. Whether you are a small fashion company or a big luxury brand, efficient operations are essential to staying ahead of the competition. And efficient operations start with inventory management.
Inventory management involves tracking, managing, and maintaining an optimal inventory level of clothing, shoes, jewelry, accessories, or whatever else you sell. It can be a complex process and may encompass everything from raw material sourcing to textile manufacturing to ordering from vendors to quality assurance to fulfilling orders for your customers.
In this article, we will explore the world of apparel inventory management, including key strategies, potential challenges, and inventory management and inventory planning software features. We’ll also discuss the importance of inventory management in the apparel industry and provide expert tips for fashion retailers on features to look out for when deciding on apparel inventory management and inventory planning software.
What is apparel inventory management?
Efficient apparel inventory management means monitoring, organizing, maintaining, and moving the right stock levels to fit your business’s needs. It is a crucial part of fashion retail. Inventory management includes all inventory-related tasks, from managing physical stocks and coordinating external functions to overseeing the internal team responsible for the process.
Effective apparel inventory management reduces inventory errors, carrying costs, out-of-stock inventory, and supply chain inaccuracies, while improving demand planning, optimizing fulfillment, and streamlining production.
Why would a business need apparel inventory management?
Inventory management in the apparel industry is essential for several reasons:
Reduce stockouts for higher customer satisfaction
Proper inventory management in the apparel industry is vital to avoid running out of stock. A lack of inventory can lead to lost sales and unhappy customers. However, maintaining adequate stock levels allows businesses to gauge customer demand accurately and facilitate better restocking practices.
By utilizing inventory planning software such as Inventory Planner, fashion retailers and apparel companies can streamline their entire supply chain, ordering the right amount of stock at the right time to meet customer demand.
Inventory Planner can also help businesses reduce expenses, improve productivity, and make better decisions by leveraging the data provided by an efficient inventory management system.
Avoid excess and dead stock
Understocking can result in lost sales, but overstocking can be just as big of an issue for your bottom line. Too much inventory results in unnecessary holding costs for excess inventory and leads to unmoved dead stock piling up in your warehouse, losing value. To combat these two scenarios, businesses should track sales and make accurate demand forecasts so they can adjust production and ordering accordingly.
Retail tools like Inventory Planner provide reliable data on the health of your inventory and ordering practices. This visibility helps businesses adjust quickly to shifting trends and determine how much stock they need for every purchase order. It also helps identify unprofitable items that can be sold at a discount or bundled to increase sales and reduce carrying costs.
Optimize warehouse layout and space
Space is often limited in retail stores and warehouses, especially in the apparel industry, where businesses carry a wide variety of SKUs and item types. This problem gets a lot worse when you have excess stock or deadstock.
Efficient apparel inventory management helps businesses make the most of their available space, reducing storage costs and improving accessibility. An organized inventory management approach allows you to stay on top of your warehouse operations, including receiving deliveries, pulling stock, and storing, packing, shipping, and returning orders.
Financial Reporting
Businesses need apparel inventory management in order to provide accurate financial reporting. By tracking inventory levels and forecasting demand, retailers can assess inventory value for financial statements, make informed financial decisions, and reduce carrying costs, freeing up capital for other areas.
Prevent retail inventory shrinkage
Fashion retailers often face the problem of inventory shrinkage due to internal fraud, damage, theft, and shoplifting. Proper clothing inventory management can help mitigate these risks by tracking each unit’s movement.
The right inventory software provides real-time updates on deliveries, sales, and returns, making identifying and preventing potential losses easier. It also eliminates the need for stressful manual recording and reporting, saving time and money and reducing administrative errors.
What should you look for when deciding on platforms for apparel inventory management?
Selecting the right platform for apparel inventory management is a crucial decision for any fashion or retail business. To make an informed choice for your needs, consider the following key factors:
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- Scalability. Make sure the apparel inventory planner can accommodate both small and large inventories as your business grows, allowing for easy scalability.
- Integration Capabilities. It’s crucial to ensure that the inventory management platform integrates well with your other business apparel systems, such as inventory planning software, warehouse management system, ERP system, POS, e-commerce website, accounting software, supplier systems, and anything else in your tech stack. This reduces the need for manual data entry and ensures data consistency across your organization.
- Real-Time Updates. A robust inventory management system should provide real-time updates on inventory levels. This helps you make informed decisions, avoid overselling, and maintain accurate stock counts.
- Multi-Channel Support. If you sell your apparel through multiple channels, such as physical stores, e-commerce websites, and other marketplaces (e.g., Amazon, eBay), ensure the platform can manage inventory across all these channels simultaneously.
- Inventory Tracking. Look for features that allow you to track inventory by SKUs, item type, color, size, style, or any other relevant attributes specific to your apparel items. This granularity is essential for apparel businesses with diverse product lines.
- Supplier Management. Consider whether the platform can help manage your relationships with suppliers. It should be able to track lead times, manage purchase orders, and provide insights into supplier performance.
- Multi-Location Support. The platform should support multi-location inventory management if you have multiple warehouses or retail locations. This ensures accurate stock levels across all locations and allows for efficient order fulfillment.
- User-Friendly Interface. The platform should have an intuitive and user-friendly interface. Your staff should be able to navigate the system easily and perform tasks without extensive training.
- Reporting and Analytics. Look for robust reporting and analytics features. These can provide valuable insights into your inventory performance, sales trends, and overall business health.
- Security and Compliance. Consider the platform’s security features, especially when handling sensitive customer and financial data. Ensure that it complies with relevant data protection regulations.
- Cost and ROI. Evaluate the cost of the platform and consider the return on investment (ROI) it can provide. While finding a cost-effective solution is important, remember that investing in a robust inventory management system can save you money in the long run through improved efficiency and reduced errors.
- Customer Support and Training. Assess the level of customer support and training provided by the apparel inventory planner you are considering. Good customer support can be crucial for resolving issues and getting the most out of the system.
- Inventory Planning Integration. A robust inventory management system is much more effective when paired with dynamic inventory planning software. While inventory management solutions help you stay on top of how much inventory you have, inventory planning solutions give you the ability to make accurate forecasts into the future so you can order the right amount of new stock at the right time to meet customer demand.
What types of apparel business systems exist?
There are several types of platforms available for apparel inventory management. These platforms are designed to help businesses in the garment industry keep track of their stock count, reduce costs, increase efficiency, and improve decision-making. The three most common methods e-commerce businesses, retailers, wholesalers, and manufacturers use for apparel inventory management are:
- Paper-based systems
- Spreadsheet systems
- Apparel inventory software
Paper-based system
Paper-based systems for apparel inventory management may be suitable for small businesses with limited catalogs, but they have several drawbacks. The information on paper documents can quickly become outdated, and tracking changes or modifications is difficult. Manual inventory control has many challenges, including human error, lost documents, and unreliable data.
Spreadsheet system
Inventory spreadsheet systems like Microsoft Excel or Google Sheets are cost-effective for managing apparel inventory. They are easy to use, versatile, and can be customized to fit the needs of many businesses. However, spreadsheets can be difficult to learn, repetitive, and time-consuming. Inputs and calculations must be done manually, which makes them susceptible to the same human errors and outdated information as paper-based systems, and they are still very labor-intensive.
Apparel inventory software
Apparel inventory software is designed to streamline, automate and manage all apparel inventory processes, removing human errors and ensuring all data and calculations are up to date and accurate. Here are some of the other benefits:
- Reduced inventory errors
- Reduced carrying costs
- Reduced out-of-stock inventory
- Increased supply chain accuracy
- Improved planning and forecasting
- Optimized fulfillment
- Streamlined production
When searching for apparel inventory software, it’s important to consider several key features, such as scalability, cloud-based capabilities, order management, and sales processing. The cost of the software is also a major factor to keep in mind, as businesses need to choose a solution that fits their budget.
Improve your apparel inventory management with the Inventory Planner.
When choosing an apparel inventory management software, it’s important to remember that your inventory management processes are only as good as your inventory planning practices. If you don’t have accurate forecasting of demand and aren’t factoring in considerations like supplier lead times, seasonality, promotions, marketing, and influencer campaigns, you won’t order the right amount of stock at the right time to fulfill every customer order. The first step to proper inventory management starts with inventory planning.
Inventory Planner offers advanced tools and features that help organizations optimize their inventory planning strategies. Inventory Planner’s cutting-edge forecasting capabilities allow users to customize their models to adapt to emerging trends and numerous other market factors. The platform also streamlines bundling and assembly processes and supports multi-location inventory planning. Its advanced reporting features provide valuable insights on 200+ metrics, allowing businesses to prioritize purchasing decisions to boost sales while safeguarding cash flow.
Inventory Planner’s data-driven approach makes it an excellent choice for businesses looking to make informed inventory purchasing decisions and succeed in the competitive apparel retail market.
Inventory Planner offers advanced capabilities, custom forecasting models, optimized safety stock levels, and multi-location inventory planning. It aligns inventory management and planning with marketing initiatives and streamlines ordering processes, making it easier to manage inventory.
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