When you first launch your fashion business, it is likely that you will use spreadsheets to keep track of your inventory items. This is great for small apparel companies but as your company and the customer demands expand, you start selling on multiple channels, and your procedures become more complex, this approach can prove inefficient.
The most valuable asset for many companies is their inventory, both in terms of its value on the balance sheet and in terms of how crucial it is to the company’s operation. Proper inventory management is challenging, but it may boost your company’s profitability and increase the value you provide to customers. The question is, how do fashion business owners know when it is time to invest in inventory management software?
In this article, we’re discussing the challenges of apparel inventory management, as well as the top 7 signs that will tell you that it is time to subscribe to an inventory management system for business enterprises in the fashion industry.
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What is the main purpose of inventory management?
Many supply chain executives believe that having more inventory is always preferable. This notion, however, is not always true and frequently results in subpar supply chain management and inventory control. In fact, having an excess inventory does not guarantee that you will be able to increase customer satisfaction.
The main purpose of inventory management is to optimize customer demand fulfillment while minimizing inventory costs. This is achieved by having stock of the right products in the right locations at the right times. We refer to this as inventory optimization.
But how will you know if you have an inventory problem? When is it time to invest in an effective inventory management system for business enterprises in the fashion industry?
7 Reasons Why Your Apparel Business Needs an Inventory Management Solution
Here are 7 signs that you are not managing your stock in an effective way and that you need a management system for business inventory.
1. Stock management is taking all of your time
Laboriously keeping track of each finished product you sell through each sales channel is not only tedious but also takes time away from what you should actually be doing: expanding your apparel business. As your company grows, you will need to concentrate more on other activities relating to growing your consumer base. You cannot accomplish this if you need to check every spreadsheet twice.
2. You don’t know how much inventory you have
Have you got any idea what products your apparel company sells in a given period of time or how your inventory moves? If you have no data on your daily sales volume, stock flow, sales velocity, or stock turnover, that is a clear indication that you require an effective inventory management system!
A good inventory management solution will allow you to generate reports with the push of a button so you can know the correct inventory you have at any given time. This will enable you to make more informed inventory decisions, including decisions on pricing, supply chain, and your overall overarching strategic objectives.
3. There are inventory discrepancies
Something is undoubtedly wrong with your inventory tracking if you have to regularly adjust your anticipated stock to match what you have sold. With the use of an efficient inventory management solution, you will be able to identify the potential causes of any discrepancies Additionally, the dedicated software solution will assist you in identifying shrinkage threats like theft and damaged stock, which in turn will lead to money savings.
4. You are often running out of stock
Running out of stock across your entire warehouse on a regular basis is a problem because you’ll start missing out on opportunities to sell to your customer base and your customer satisfaction levels will suffer. The right inventory management system for business enterprises in the apparel industry can provide you, your warehouse personnel, and your sales team with real-time information about the products you have on hand, including their quantity and location.
You can set, manage, and receive low-stock alerts to make sure you never have to deal with issues like phantom inventory or insufficient inventory. This is especially important if you have multiple warehouses and complex logistics.
5. You are losing money due to overstocking
If you don’t know just how much stock you should keep on hand, you run the risk of ordering too much from your suppliers. Even slightly overstocking can lead to a waste of money that can be used for other purposes (such as marketing your garments).
While it is smart to have safety stock, slow-moving products can easily turn into dead stock, i.e. dead inventory. With apparel businesses that don’t use an inventory management solution, dead stock can remain in the warehouse space useless and forgotten. A dedicated software solution will provide your fashion business with the tools it needs to determine the right stock levels based on thorough customer demand forecasting and avoid issues like excess stock.
6. You do too much manual counting of physical inventory
An occasional manual counting of physical inventory is helpful because it enables you to verify the accuracy of your inventory and look for any potential inconsistencies. However, physical inventory counts shouldn’t be a regular occurrence. If you are relying solely on physical counts of inventory to determine what stock you have and don’t have, it can become a very taxing and time-consuming operation. Not to mention that both you and your staff are only human, which means that mistakes are inevitable.
If your physical counts of inventory are wrong, so will your estimates of average inventory, inventory turnover ratios, economic order quantity, minimum order quantity, minimum levels, and other inventory management formulas!
An effective inventory management system can accurately track your inventory supply in real-time, from the minute you place the order with your vendor until it arrives in the hands of the client, thus reducing the need to count on your stock levels manually.
7. You can’t meet customer expectations
It’s impossible to deny that customer expectations have increased over the last few years. Fashion retailers must meet a number of customer expectations including free shipping, next-day delivery, and simple customer returns. Doing this efficiently relies on being able to connect your inventory levels, warehousing procedures and warehouse management, sales channels, and shipping carriers. This makes managing orders and returns easier, allowing apparel companies to concentrate on growth without having to worry about meeting client expectations.
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How ApparelMagic Can Help With Apparel Inventory Control
Cloud inventory software from ApparelMagic has everything needed to help you manage your entire fashion retail business. Our software can swiftly satisfy your needs regardless of the size of your apparel business. Some of the reasons to choose ApparelMagic’s services include:
- An extremely flexible system. ApparelMagic is a scalable, quick, and highly adaptable inventory management system for growing fashion businesses.
- An abundance of features and integrations. We offer a variety of cloud inventory management software features, such as inventory control, order management, mobile barcode scanners, and eCommerce tools.
- Personalized dashboard. A visual dashboard can completely transform your company by providing valuable insights at a glance. You can be confident that you always get the most recent information because they automatically update.
- World-class support. A customer relationship manager is assigned to each new account and they are responsible for offering training, advice, and customization. Training and consultation are included free of charge during the trial period.
The Bottom Line
How you store, track, and manage your inventory data is becoming more and more crucial when running a fashion business in such a competitive market. By making an investment in quality inventory management software and pairing it with effective inventory management techniques, you can make sure that the logistical aspect of your company is prepared for the future.
If you can relate to any of the warning signs outlined in this post, it might be time to consider investing in an effective inventory management system for business enterprises in the fashion industry. Contact our ApparelMagic team if you’re prepared to change the way you manage inventory.
