Your Ultimate Guide to Apparel Inventory Management

Inventory management is one of the most difficult tasks in the apparel industry. When everyone else in the industry is focusing on styles, trends, and tastes you can stay on top of the demand curve when you order mannequins and leg forms to showcase your products. This will help you with inventory management and transform your apparel business. Besides the traditional inventory management practices, there are specific strategies in the apparel industry that should be followed. Such strategies will help you dispose of products whose popularity is declining and order next season's products.

The Importance of Inventory Management in the Apparel Industry

You can order mannequin leg forms right online to better display the latest fashion designs. Your apparel business is likely to grow and here's how inventory management works for three essential reasons.

Helps Reduce Stock Outs and Improve Customer Satisfaction

Stock-outs negatively affect a customer’s brand perception in both short-term and long-term. Retailers can lose out in the short term since a customer cannot wait until the item is back in stock to make a purchase. Most likely, they will move to another retailer with the product especially if they are making an online purchase. In the long term, you will lose customer trust and eventually, they will refrain from visiting your physical or virtual store and move to reliable vendors.

Reduces Carrying Costs and Helps to Free up Some Capital that Goes into Storage and Insurance

Inventory management in the clothing industry costs a lot of money. In as much as holding inventory is part of business, holding a lot of inventory can be risky for your business. Maintaining healthy cash flow is essential in running the business. However, it would be impossible if the money is tied up in processes such as labor hours and operational costs. Besides, holding too much inventory increases other risks such as theft, damage, and lost items.

Many Investors Evaluate a Company’s Inventory to Assess its Financial Health

When investors want to evaluate a business, they will examine performance ratios including inventory and financial ratios. The inventory ratios are important because they indicate the company’s efficiency starting from the production stage to meeting customer orders. Even if different methods are used by different investors, they often seek the same answers. First, they seek how efficient a company is in meeting production and sales demand. And secondly, whether the company is using any fraudulent accounting.

Basic Strategies for Apparel Inventory Management

There are two main strategies that retailers can use to manage clothing inventory

●Pen-and-Paper Method
This method is suitable for small retailers. The method involves separating a paper sheet into different categories which are further subdivided into subcategories for different styles. For example, a category may entail wrap cloth and the subcategory may include different colors or sizes. This is one of the most inexpensive methods and easy for small businesses and boutique shops to implement. However, as the business grows it may be difficult to scale up this type of inventory management.

●Spreadsheets
The spreadsheet method entails using computer software such as Google Sheets and Microsoft Excel to manage your inventory. The information can be tallied manually using the pen and paper then the information is entered into the spreadsheet. The method is suitable for both small-scale and large-scale businesses as it is dynamic and may change depending on the needs of the business.