With mounting competition in the modern apparel business industry, success relies on taking advantage of every opportunity to increase profitability. So, what does the future of the apparel business look like in terms of growth opportunities in 2023? The answer may lie in ERP (Enterprise Resource Planning) automation functionalities. 

Those functionalities include AI-enabled inventory control, order processing, access to real-time reports, and so much more. With the help of ERP automation, companies can reduce operational costs by streamlining manual processes and repetitive tasks and optimizing the supply chain, boosting productivity, and ensuring that operations are running the right way.

Additionally, this automation can increase customer satisfaction by providing them with accurate information on product availability and delivery dates. 

Ultimately, harnessing the power of ERP automation functionalities may prove to be a critical factor in achieving success in the ever-changing apparel industry in 2023. 

Let’s take a deep dive into how exactly ERP automation can help you run an apparel business worthy of accolades, and answer the question of how to implement an ERP system effectively.

What’s Happening in the Fashion Industry in 2023

The eCommerce business model has gained immense popularity. As things stand, Shopify is booming, with more than 500.000 stores active. All of this indicates that nothing is stopping the apparel industry from evolving throughout 2023. 

Key trends include direct-to-consumer sales, personalization, and sustainability. Nowadays, customers want a comfortable shopping experience, rich and field with meaningful opportunities for connection with brands. And luckily, it’s not hard to deliver that as businesses can use both on-site methods, such as live chats to engage with their customers and help them enjoy a better experience, or via social media platforms.

However, while it’s pretty easy for businesses to engage with prospects, they face significant challenges navigating global supply chain disruptions and keeping up with fast fashion trends. Still, technological advancements in the fashion industry are hard to ignore. Artificial intelligence, the Internet of Things, and data analytics enable apparel companies to forecast trends, optimize production, and deliver personalized experiences without a hitch, and those that are not leveraging them, are lagging behind.

By leveraging software solutions such as ERP automation tools, apparel businesses can gain real-time data visibility into operations and make data-driven decisions to thrive in today’s dynamic landscape.

ERP, the Key to Unlocking the Potential of Apparel Businesses

The apparel industry is a vast industry that encompasses various divisions, including production planning, computer-aided design, retailing, accounting, manufacturing, quality control, and so much more. Each area plays a significant role in the success of the business, from designing and manufacturing garments to managing finances and human resources. 

Effective supply chain management is also crucial to keep the warehouse and inventory in good shape. With the growing complexity of the industry, apparel businesses can benefit from the use of specialized ERP software to streamline processes across departments. Such software offers accurate and up-to-date stock and location information, leading to better decision-making and faster delivery of products. 

Choosing the Right ERP System

When choosing an ERP automation solution for an apparel business, there are many factors to consider. Scalability and integrations with other software applications are some of the most important considerations when selecting an ERP automation solution. 

Additionally, cost and user experience should also be taken into account. It is essential to identify the current needs and future goals of the business in order to determine what type of ERP automation system is best suited.

ERP automation software options are widely available online. Each software offers different features that can help businesses fulfill their specific needs. For example, some are specifically geared towards mid-size companies and provide functions like inventory management and product configurator, while some support enterprise-level implementations and provide capabilities such as distribution management and accounting. 

Needless to say, the best ERP systems have high integrability enabling users to expand their functionalities with just a simple click of a button. Having the ability to develop the features of your ERP system as you grow your business operations is something each business needs in its arsenal of tools.

Don’t Forget the Integrations

When it comes to selecting the right ERP for a fashion apparel business, you want a system that comes equipped with product lifecycle management, customer relationship management, and other features. 

Having an ERP with these extras can help automate the process of managing inventory, invoicing customers, tracking sales data, and more – all while keeping customer satisfaction at peak levels. This ensures that you can keep up with the needs of your customers better and grow your business faster.

Implementing an ERP System for Apparel Businesses

To ensure an effective ERP system implementation for apparel businesses, it is important to clearly define goals and objectives. Evaluate different solutions and select one that best fits the business needs, taking into account major features, scalability, compatibility with existing systems, and cost. Assemble a project team of professionals with expertise in the apparel industry, IT, and project management to manage the implementation process. 

Prepare hardware and software infrastructure for the new system to ensure adequate support. Data must be clean and consistent before the transfer to the new system happens. Employees need training on the new system and thorough testing conducted before going live.

Once live, monitor performance regularly and continuously improve processes to maximize ERP benefits – ultimately leading to improved efficiency and bottom-line results.

A Handful of Benefits You Can Enjoy From Using ERP Automation Solutions

• Streamlined inventory management: With an ERP system in place, businesses can gain real-time visibility into inventory levels, orders, and shipments to optimize stock levels and reduce waste, as well as ensure customer demands are met.
• Improved production planning: An ERP system can help organizations schedule production more efficiently by taking into account lead times, capacity, and resource management/availability, leading to decreased bottlenecks and improved productivity.
• Faster order processing: Automating order processing through an ERP system helps reduce the time it takes to fulfill orders and do routine tasks from receipt to delivery, increasing customer satisfaction and assisting companies to remain competitive.
• Better financial control: An ERP system provides better insight into a company’s financial management, making it easier for them to monitor expenses, revenue, and cash flow while making more intelligent business decisions that increase profitability.
• Enhanced collaboration: Through an ERP system, different departments within a business can share information speedily while promoting a cohesive organizational culture with reduced errors.
• Increased scalability: As companies develop and grow, their needs change; an ERP system is highly customizable and configurable, which makes it a flexible tool for companies of all sizes.

Why You Need an ERP System

By seamlessly integrating various business processes, an ERP system eliminates redundant procedures, reduces data entry errors, and makes it possible for business owners to manage and control their entire operation effectively. 

One of the significant advantages of implementing an ERP system is that it can help store massive amounts of data across a wide range of business processes, providing business owners with the flexibility they need for future growth and expansion. 

Additionally, accurate inventory tracking is a critical feature of an ERP system that can prevent storage space issues, cash flow strain, and delivery delays. It allows companies to track inventory levels in real time, make informed purchasing decisions, and ensure the efficient flow of goods through their supply chain. 

Furthermore, by having access to an ERP system, businesses can improve customer experience by providing progress updates, making on-the-fly adjustments, and ensuring the timely delivery of products or services. 

Moreover, all the best ERPs are cloud-based systems, so you never have to worry about downloading or installing software on your devices.

Conclusion

ERP automation functionalities can be a critical factor in achieving success in the apparel industry in 2023 and in the future. With the help of AI-enabled inventory control, real-time data, order processing, invoicing, reporting, and more, companies can reduce operational costs, optimize the supply chain, and increase customer satisfaction. 

The apparel industry will continue to evolve with direct-to-consumer sales, personalization, and sustainability trends, and technological advancements such as AI, IoT, and data analytics becoming more prominent. As an apparel business leader, that technology can enable you to forecast trends, optimize production, improve business functions, and deliver personalized experiences for customers. Due to this, it’s in your best interest to keep an eye on systems that help you carry out multiple processes from one single hub. 

By following best practices for implementation, businesses can benefit from increased productivity, profitability, and compliance while promoting a cohesive organizational culture with enhanced collaboration.

Timely delivery of orders is key for customer satisfaction and business success in the fashion world. To ensure that orders are delivered on time, businesses need to have accurate information about their inventory levels and order commitments. This is where the Available to Promise (ATP) calculation comes in, and why it is such an important feature for fashion ERP systems like ApparelMagic to have. 

The Available to Promise calculation is used to determine the quantity of a product that can be promised to a customer based on the current inventory levels, existing orders, and the production schedule. Essentially, it is a calculation that tells businesses how much inventory they have available to fulfill new orders, taking into account any outstanding commitments. This information is critical for businesses to make accurate promises to their customers and avoid stockouts.

To calculate Available to Promise, the system takes into account the following variables:

On-hand inventory – the total number of products currently in stock.

Allocated inventory – the number of products that have been allocated to existing orders.

Planned receipts – the number of products that are expected to be received into inventory over a specific period.

Backorders – the number of products that have been ordered but are temporarily out of stock.

Once these variables have been calculated, the Available to Promise calculation can be made, giving businesses an accurate picture of their available inventory levels and enabling them to make accurate delivery promises to their customers.

Available to Promise is particularly important for B2B e-commerce stores, where customers often place large orders and require exact information about inventory levels and delivery times. B2B customers are also likely to be repeat customers, so it is important to build trust and maintain good relationships by delivering on promises.

Furthermore, Available to Promise is also important for B2C platforms like Shopify. Customers today have high expectations for delivery times and accurate information about product availability. When businesses offer correct details about their stock and delivery schedules, it gives customers confidence in their reliability, which creates a satisfying shopping experience. This leads to a stronger connection with customers, making them more loyal and likely to return for repeat purchases. 

In conclusion, the Available to Promise calculation enables businesses to make accurate delivery promises to their customers, avoid stockouts, and build trust with their customers. Whether your focus is B2B e-commerce stores, a B2C platform like Shopify, or both types of sales channels, Available to Promise is a critical calculation that can help you keep up with increasing demand and customer standards. 

In today’s fast-paced retail industry, apparel companies face numerous challenges when it comes to managing their inventory and operations. Poorly managed inventory can lead to lost sales, higher costs, and inefficiency. To tackle these issues, retailers must have a reliable apparel management software solution that can help them manage every part of their business, from bookkeeping to seamless inventory management and software integration solutions that help them boost efficiency even further. 

Implementing an apparel software system is enough to maximize efficiency and ROI. As things stand, the apparel management software market size is considered big, and it will continue to grow to exceptional heights, or to be precise, $1399.8 Billion by 2028

Still, you can take apparel software efficacy to a new level, as integration can play a critical role in streamlining processes and further optimizing performance. 

In this article, we will explore key strategies for integrating apparel software systems with existing technologies and platforms to achieve maximum efficiency and ROI. By following these strategies, apparel companies can help themselves reap the benefits of a seamlessly integrated system that saves time, reduces costs, and improves overall business operations.

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What’s Software Integration

Software integration refers to the process of connecting two or more software applications to work together as a single system. In today’s technology-driven world, many businesses rely on various software tools and systems to manage their day-to-day operations. However, these systems often operate in silos, meaning they don’t communicate with each other, leading to inefficiencies and errors.

Software integration aims to eliminate these issues by creating a seamless flow of data between different software applications. By integrating systems, businesses can streamline their processes, set up automated workflows, and reduce the likelihood of errors that may arise from manual data transfer.

Types Of Software Integrations

There are several approaches to software integration, including point-to-point integration, middleware integration, and API-based integration (Application Programming Interface). Point-to-point integration involves connecting two systems directly using custom code or pre-built connectors. Middleware integration uses a third-party platform that sits between multiple systems and facilitates communication. API-based integration uses standardized interfaces called APIs that allow different systems to communicate.

With the right integrations, you can streamline your business workflows and enjoy a wide range of benefits and a more efficient and profitable business journey. 

How the Most Popular Apparel Software Combines ERP and CRM Together

When it comes to software integrations, the coupling of ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) is an essential pairing that cannot be overlooked. This dynamic duo provides everything that apparel businesses require to achieve maximum efficiency in their operations and streamline every single complicated process you might encounter.

By integrating these two systems, companies can effortlessly pinpoint bottlenecks, prioritize sustainability measures, and increase ROI across all aspects of their operations. In addition, the combination of ERP and CRM provides a comprehensive solution that enables businesses to streamline their processes and optimize performance without sacrificing accuracy or productivity. With this powerful integration in place, they can confidently tackle any business operation they set out to perform with ease and precision.

ApparelMagic enables you just that, the benefits of the two from one streamlined hub. But before we talk about how ApparelMagic can help you, let’s break down how these two systems work.

ERP Vs. CRM 

The two critical software systems serve distinct purposes in modern businesses. ERP’s primary objective is to enhance productivity by streamlining business processes across all organizational departments, while CRM focuses on improving customer interactions and client retention. In addition, CRM aims to increase sales, while ERP concentrates on optimizing the precision and efficacy of the entire system.

Some of the key components of an ERP include workflow management, inventory tracking, scheduling, POs (Purchase Orders), invoicing, and other capabilities. This makes it a valuable tool for streamlining and expediting internal organizational tasks such as project planning, finance management, and order fulfillment. By integrating an ERP system into their operations, businesses can improve efficiency and accuracy while reducing manual errors and delays. 

While CRM only focuses on helping you manage leads and nurturing them, it’s not uncommon for businesses to do that manually. Now on paper, this might seem like a lackluster feature compared to what ERP offers; however, if you combine them, you can expect to enjoy benefits all across the board and operate as a business that is always on point.

Overall, the combination of ERP and CRM provides a perfect solution that enables businesses to optimize their processes from end to end while enhancing customer satisfaction and driving revenue growth.

The benefits of using these systems include the following:

• Data centralization for easier and faster data entry;

• Improved collaboration across different departments without siloes;

• Reduced data duplication with consistent guidelines and structures;

• Better forecasting by matching customer demand with ERP data;

• Time savings and increased efficiency by avoiding switching between systems;

• Improved customer service and experience through complete visibility of customer data in real time.

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The Various Integration Solutions that can Help you Boost Efficiency and ROI

The integrability of ApparelMagic is not limited to just CRM. It can integrate with various platforms such as Shopify and WooCommerce, QuickBooks, and ShipStation. Integrating ApparelMagic with any of these platforms is the answer to the question of how to maximize efficiency and improve your overall business workflows.

1. Shopify 

Shopify is the ultimate solution for business owners that are looking to launch their own online stores. With over 4.4. million active stores, this platform has firmly established itself as one of the leading eCommerce solutions on offer today. 

Its user-friendly interface and exceptional features make running a store more manageable than ever before. And with ApparelMagic integrated into your shop’s setup, you can effortlessly synchronize data across multiple shops – transforming busywork from tedious into an absolute breeze.

The same can be done with WooCommerce for those that prefer the more familiar WordPress feel.

2. QuickBooks

You can unlock more opportunities for your apparel store with the Quickbooks and ApparelMagic seamless integration solution and run operations quickly without a hitch, selling in any currency to customers around the globe.

With this combination of powerful tools, you can manage critical aspects like customer bills, vendor payments, invoices, and memos – all while keeping track of finances effortlessly.

3. ShipStation

With this powerful integration, you can keep all shoppers updated on their orders and ensure they are constantly updated. This tool is crucial if you want to improve the customer experience you provide.

All users can easily sync their invoices from ApparelMagic to ShipStation, where shipping quotes can be requested with just a click.

Standalone Works

ApparelMagic offers you the flexibility to run your B2B commerce store cost-effectively and with ease. This full-service software is the complete solution as it allows you, as a business, to cut out all middlemen, enabling you to enjoy an enhanced experience when setting up a store with creative templates, and all of that will take you only a few minutes.

With features such as attaching videos, pictures, and much more, you’ll create a store that allows all customers to enjoy a unique experience and have access to preorders of inventory offerings and so much more. This platform can bring greater success through a simplified workflow process without the need for any other app integrations.

The biggest benefit of using an all-in-one solution is the transparency you will enjoy. Having a user-friendly dashboard that consolidates all available tools in one place will boost your performance and, therefore, ensure that you see ROI from using such a powerhouse of an app.

Managing all aspects from a single hub makes it easier to navigate and utilize the tools as needed while providing seamless access to data across different business areas without delays. With all data organized into a single platform, it becomes simpler to comprehend accounting information and its relation to past quarters. Additionally, this consolidated view allows for quick identification of popular products and potential raw material shortages, providing valuable visibility for achieving success.

Final Thoughts

For apparel businesses, software solutions are essential to streamline inventory management and other crucial business operations. Maximizing efficiency and return on investment is easy with the right software integrations. There are several approaches to integration, including point-to-point, middleware, and API-based integration. 

Combining ERP and CRM provides a comprehensive solution that optimizes processes end-to-end, enhancing customer satisfaction and driving revenue growth. By integrating Shopify, QuickBooks, and ShipStation with ApparelMagic, businesses can manage finances, streamline operations, and improve the customer experience. Standalone solutions also work well to eliminate middlemen and enhance the user experience when setting up B2B commerce stores. 

Following the strategies outlined in this article leads to a seamlessly integrated system that saves time, reduces additional costs related to business operations, and enhances overall business efficiency for apparel companies.

Sales margins give companies the ability to assess the profits they generate from their products and services, and they have an impact on executive choices and long-term company strategy. By understanding sales margins, businesses can compare their current sales figures to prior sales and the sales performance of other businesses in related industries.

In this post, we provide an answer to the question “What is sales margin?”, explain the key difference between sales margin and gross profit margin, and offer a formula for sales margin calculation, along with strategies that will help you improve your entire business profitability. Let’s begin. 

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What is a Sales Margin?

The sales or contribution margin is the amount of money a business makes from the sale of a product or service. It is obtained after totaling all expenses related to providing the goods, including labor, production, and material costs.

The outcomes of sales margin estimates can help business owners assess the effectiveness of different product lines and determine which of their products are most and least profitable. Sales margins also play a significant role in business projections and budgets, retail pricing, and promotional decisions. 

Difference Between Sales Margin and Gross Profit Margin

Bots sales gross profit margin and sales margin show how profitable a certain product is by comparing its manufacturing costs and revenue. However, although they’re both crucial financial metrics, sales margin and gross profit margin measure different things:

• Gross profit margin determines the total sales revenue for all goods sold after accounting for all expenditures associated with the creation and manufacture of the products. In addition, it displays the manufacturing and sales results for the company.
• Sales margin measures the profit from a single or several product transactions over a given time period. Additionally, it assesses the business expenses associated with producing these specific products.

Why Are Sales Margins Important?

The sales margin is a key indicator of a company’s financial success because it directly relates to business profitability. 

The sales margin is the main factor influencing whether or not merchants would accept the goods. It includes the commission or margin paid to retail stores, wholesalers, and occasionally even resellers.

The product’s sales margin is primarily determined by the product’s pricing. The higher the sales margin, the better it is for the company. On the other side, a higher retail price would come from a more senior sales margin, which might disappoint the customers. After the product is sold, a decent amount of cost must be recovered, covering all associated costs and leaving a fair sales margin. 

How to Calculate Sales Profit Margin

In addition to the sales margin for a single product, you can also calculate the sales margin for several products. By establishing quarterly, monthly, or even yearly sales margins, businesses can evaluate the viability of sales products and allow comparative price analysis of items over time. 

To determine the sales profit margin, you subtract all expenses related to the sale of the item from its selling price. The selling price is then simply divided by these expenses. Depending on the type of business, several factors will go into this calculation, but they usually include expenditures associated with providing products and services, income, commission, sales discounts, and sales margin. 

Follow these steps to get the sales margin:

• Calculate the total revenue from product sales
• Deduct all manufacturing-related costs from the entire revenue to arrive at the net profit
• Finally, divide the net profit by the total revenue to obtain the sales margin.

Use the sales margin formula, T – C = NP/T, where:

• T = total revenue
• C = product cost
• NP = net profit

5 Strategies for Improving Your Sales Profit Margin

Every business keeps an eye on its bottom line and is consequently aware of its sales profit margin. Below, we are taking a closer look at how to improve your sales margin.

1. Review your processes and strategies 

​​Improving the crucial processes and areas of your business that may be preventing you from reaching your full potential is fundamental to raising your sales profit margin. And as you can guess, you cannot achieve this if you are unaware of the points and procedures involved.

You must carefully consider all of the important aspects that affect your ability to generate income or control production costs, including how you spend money, how you produce your goods, and how you acquire customers.

Examine your expense reports to identify any unnecessary expenditures. Find areas in your sales process where a high amount of prospects tend to lose interest. Review your marketing techniques and service architecture to determine whether you can improve how you acquire and retain customers. In addition, conduct a competitive analysis to find out how other businesses in your industry are doing. This is the best way to find out what you are doing incorrectly and make an effort to fix it.

2. Remove products that don’t sell well

Having a smaller selection of goods in stock will free up your time and energy for the most important products and decrease the overall workload of your business.

Identify your best-selling products and focus on manufacturing and promoting those products. In addition, stop producing and promoting products that are less profitable. By doing this, you’ll be able to focus your time and efforts on the products that will bring in the most money.

3. Increase prices strategically

If you can strategically and effectively raise product prices without losing too many of your customers, you will increase income on every sale you make, which will immediately increase your sales margin. However, pulling off a strategic increase in price can often be easier said than done.

Depending on the industry, market position, product portfolio, and external factors like the general economic environment, different businesses will have different optimal retail pricing strategies.

If you want to identify the strategy that will work best for your business, you will need to do in-depth market research, and competitive benchmarking, strategically construct and comprehend your consumer personas, and be ready to make mistakes and learn from them. 

4. Try upselling and cross-selling 

Upselling is a sales strategy where customers are moved from inexpensive products to more expensive, better-quality, or feature-rich alternatives. However, in order for this strategy to be successful, you must ensure that your customers are aware of the benefits of purchasing your more expensive products.

Cross-selling, on the other hand, is a strategy used to persuade clients who initially came in to buy one thing to also buy other, related items. Cross-selling is a great way to increase your sales and increase customer satisfaction. 

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5. Reduce your operating expenses

If you want to increase your sales margin, start by reducing your operating expenses as much as you can. There are many steps you can take to lower your operating expenses, such as: 

• Reducing labor costs by cutting unnecessary staffing
• Letting go of expensive office space if the majority of your team can work remotely
• Reducing advertising costs where possible
• Cutting on overhead expenses
• Reducing customer servicing costs by using customer support software
• Paying invoices as soon as possible to take advantage of vendor discounts

Another option is to find solutions to automate tedious daily tasks that burden your personnel. This will enable you to free up your staff members’ time so they can concentrate on their important duties and, as a result, lower operating costs.

The Bottom Line

Investors and analysts use a variety of metrics to help them assess a company’s financial stability and health, and sales margin is one of them. Sales margins have an impact on business decisions, pricing strategy, and the marketing of goods and services, and are crucial for forecasting sales and setting budgets. Companies can plan for seasonal changes and yearly sales variation patterns by understanding their sales margins.

Increasing your sales profit margin is the best way to achieve your growth goals and business success, and taking some of the above-mentioned tactics into consideration can be of great help. 

Is there any way to know how much product you will need for the next quarter? Or, for the next holiday season? How much money you will need to invest in inventory for the upcoming fiscal year? The answers are in demand forecasting.

Demand forecasting is the process of creating models that assist in predicting future customer demand for particular products over a specific period of time using historical data and other analytical information. In addition to other things, it aids in the development of product road maps, inventory production, and inventory allocation. According to McKinsey, a 10% – 20% increase in supply chain forecasting accuracy can result in a 5% decrease in inventory costs and up to a 3% rise in revenues. 

But how exactly do you forecast demand? In this post, we’re providing an answer to the question “What is demand forecasting?” and cover everything on demand forecasting, including all the different types and methods of demand forecasting, and how to choose the one that works best for your company.

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What is Demand Forecasting

Demand forecasting is a methodical way to estimate how much of a certain product will be in demand in the future. Simply put, it enables you to accurately predict sales over the following weeks, months, or even years so that you always know how much inventory to order and keep on hand.

There are numerous ways to accomplish this, from manual calculations to automated inventory forecasting software but in general, inventory forecasting is a combination of market knowledge and data from previous sales.

Demand Forecasting Types

Demand forecasting can be conducted in numerous ways and your forecast can change depending on the forecasting model you use. The best approach is to do multiple demand forecasts in order to get a more complete picture of your potential sales. Below are the different types of demand forecasting. 

1. Active demand forecasting

This type of demand forecasting is the best option if your company is new or growing. An active demand forecasting model takes into account your expansion strategies, market research, and advertising initiatives. It also factors in external variables, such as the state of the economy, growth predictions for your industry, and anticipated cost reductions resulting from increased supply chain effectiveness.

2. Passive demand forecasting

Passive demand forecasting uses historical sales data to forecast future demand. It’s a strategy that counts on sales this year being roughly equal to those from the previous one. Because it doesn’t call for the application of statistical techniques or the analysis of economic trends, this type of demand forecasting is simpler than other types of demand forecasting. This is a good strategy for companies that prioritize stability above growth.

3. Internal forecasting

This type of demand forecasting examines your operations to identify any potential barriers that could impede your growth or point out the untapped potential within the company. Internal business demand forecasting takes the funding of your company, the amount of cash on hand, profit margins, supply chain activities, and employees into account.

4. External forecasting

External demand forecasting takes into account broader economic trends and considers how such trends may impact your company’s objectives. In addition, this type of forecasting can give you guidelines for how to achieve those objectives. It may also include other elements that might directly impact your supply chain, such as the availability of raw materials.

5. Long-term forecasts

The goal of this demand forecasting model is to influence the trajectory of your company’s growth by making predictions one to four years in the future, partially based on sales data and market analysis. You can organize your supply chain operations, capital investments, and marketing plan using this forecasting method in order to get ready for potential demand.

6. Short-term forecasts

Short-term projections only consider the next three to twelve months. Looking at short-term demand enables you to update your estimates based on current sales data and swiftly respond to changes in customer demand. Understanding short-term demand is a good option if you manage a product range that often changes but for most companies it is simply one element of a bigger picture. 

Methods of Demand Forecasting

There are several methods of demand forecasting, and they can be divided into two broad groups: quantitative and qualitative.

Quantitative demand forecasting methods

Quantitative demand forecasting is based on previous information about customer demand, seasonal demand, supply chain efficiency, and other parameters that are driven by data. Several of the most popular quantitative forecasting methods include:

• Trend projection. The trend projection method employs historical data in order to construct a sales forecast. Although this can provide an accurate demand forecast for the immediate future, relying solely on sales history without taking other aspects into account may not be wise, especially if you need to develop a long-term demand strategy for your supply chain. 
• Barometric forecasting. This demand forecasting method projects future demand using present data. It uses statistical analysis to forecast demand.
• Econometric forecasting. This model combines data on demand with knowledge of outside factors that can affect the demand in order to produce a demand plan. Compared to other methods, econometric forecasting involves more complex statistical forecasting methodologies, but it also has the potential to produce more precise demand forecasts.
• Exponential smoothing. This demand forecasting method incorporates seasonal differences in sales into the result while also using past data as input. Because demand planning using exponential smoothing may be based on a limited dataset, it can be a helpful quantitative tool for startups and new businesses.

Qualitative demand forecasting methods

Methods for qualitative forecasting are less reliant on data and include more human input. A qualitative forecasting system makes use of both the internal and external information bases of your business. Below are some of the most popular methods for qualitative demand forecasting:

• Sales force composite. This method of demand forecasting brings together the members of the sales team, supply chain management, and other parties involved in forecasting demand. The sales staff relies on their experience and takes the lead on sales forecasting.
• The Delphi Method. Sometimes referred to as the expert method, the Delphi approach involves a demand planner who gathers a group of subject matter experts and requests their input on a series of questions regarding potential demand. The planner then compiles a summary based on the responses, which is presented to the panel. The experts rephrase the questions in light of the summary from the first round of responses. This process is repeated by the demand planner until the expert panel reaches a consensus.
• Market research. This forecasting method generates a demand prediction using information on market trends and opportunities. Plans for promotion and expansion as well as details on the capacity and constraints of the supply chain should be taken into account when forecasting the market. Startups that lack the historical data necessary for sales forecasting can benefit from it.

Both quantitative and qualitative methods have their own benefits and drawbacks. For an astute demand forecaster, a combination of both might be the ideal option.

How to Calculate How Much Inventory You Need

If you don’t have inventory management software, there are three basic calculations that can help you estimate how much stock you need to keep in your warehouse and when to reorder. 

The first calculation you can use is the inventory turnover ratio, which reveals how rapidly you run out of stock. To arrive at this estimate, your sales (COGS or cost of goods sold) are divided by the average inventory to arrive at this estimate. A low inventory turnover ratio might be an indicator that you have surplus inventory. 

Another option is to use the days sales of inventory calculation (DSI), which shows how many days it will take for your inventory to sell. To get your days sales of inventory, divide inventory by cost of sales, then multiply by 365. 

Finally, you can estimate your safety stock, i.e. how much inventory you should have in case there is a run on a certain item (for instance, ice cream during the summer months). Take the average of your top three sales days for the previous month, quarter, or year, then remove the average daily sales volume for the same period to arrive at this figure.

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Benefits of Quality Demand Forecasting

Regardless of whether your business is large or small, demand forecasting is an absolute must. Here are just a few of the benefits of demand forecasting.

• Plan your supply chain.  You can prepare ahead of time by using demand forecasting to keep inventory on hand for peak demand. With less time to fill orders, you won’t have to pay rush fees or put products on backorder.
• Recognize the influences external factors have on your sales. Forecasts might include information on economic factors, market sector estimates, and statistics on industry trends. Including these variables in your forecasting model can contribute to your ability to adjust and grow your company.
• Identify seasonal trends. Examining previous sales data will enable you to identify seasonal patterns and fluctuations. Knowing which months have lower customer demand is vital. For example, if your sales decline every June, that can be a good time to run promotions to keep your customers interested.
• Make smarter money decisions. Your previous financial statements will show you how sales revenue and the costs of products sold interact. This might help you determine when you will have enough money to buy new inventory.

The Bottom Line

Demand forecasting is a crucial component of running and expanding your company. Simply put, you need to have some idea of how much you will sell and therefore, how much inventory you‘ll need to cover those sales. 

Determining this can be a challenge. In order to be successful, demand forecasting should incorporate various elements, including reliable data, useful feedback from the sales team, outside specialists, market research, strong supply chain analytics, etc.

Ultimately, it’s up to you to choose whether to use an automatic solution or one of the several manual methods for demand forecasting. By employing efficient inventory management software like ApparelMagic, you can get extensive analytics and distribution metrics to make the process much simpler.

Have you been wondering how to start a dropshipping business? In a market that seizes any chance to make a transaction simple and convenient, dropshipping seems like a no-brainer for those who want to start their own online business. The dropshipping business model is attractive because you don’t have to think about time-consuming tasks of inventory management, order fulfillment, shipping, or maintaining stores and employees.

But despite the fact that dropshipping is so straightforward, dropshippers frequently make costly mistakes that have a negative impact on customer satisfaction and profit.

In this blog post, we’ll outline the most common mistakes that eCommerce dropshipping businesses make so that you can prevent them and advance your dropshipping business regardless of your experience. 

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What Is Dropshipping

As we all know, dropshipping is a method of order fulfillment. It is a business strategy that relieves the seller or retailer of inventory management duties. Instead, the seller can simply get in touch with a manufacturer or supplier to arrange for the delivery of the items to the customers.

The dropshipping business model comes with fewer risks and protects the seller from significant losses. In addition, making money with a dropshipping business is faster and simpler because the initial investment is smaller.

What are the Benefits of Drop Shipping?

Before we get into the biggest mistakes that dropshipping businesses make, here are the most important upsides of the dropshipping model that every “Dropshipping for Beginners” article should highlight. 

• No inventory. First on the list of pros of dropshipping is the fact that you do not need to keep inventory. This means that you won’t have to deal with issues like finding storage space for your products or protecting those products from being damaged. As a result, you will be able to spend that money on things like marketing to help your dropship online business grow. 
• No shipping. If you decide to run an eCommerce business, you also won’t have to deal with product shipment. Although there is a chance your supplier will charge you a drop shipment fee, doing everything yourself would be significantly more expensive. You won’t require shipping facilities, packing personnel, or packaging materials.
• Little risk. One of the biggest advantages of dropshipping for beginners is that you won’t have to invest tens of thousands of dollars in products. The products will be offered for sale by your supplier, and you only purchase them when you make a transaction. Pre-orders are not required. 
• No loss. Since you won’t have to worry about inventory, you won’t suffer any losses. You won’t need to stress over how many products to order, to avoid understocking or overstocking. You’ll purchase the exact number of items from your supplier to cover your orders, with no losses resulting from inventory issues. 

Dropshipping for Beginners: 7 Most Common Dropshipping Mistakes and How to Avoid Them

Having a dropshipping business sounds so appealing that it seems like everybody should want to do it, right? Wrong! Once you dive into it, you’ll realize that dropshipping for beginners takes more than just having savvy digital marketing skills. Here are 7 common dropshipping mistakes you need to avoid.

1. Starting with High Expectations

While a dropship online business can bring money, that doesn’t mean that you’re going to earn tons of cash in the first month. Starting off with big expectations can lead to disappointment and result in failure. 

In order to succeed at dropshipping, you need to be committed and persistent. You must put in the effort, give it time, and learn a lot before you can begin to enjoy the rewards. If you don’t take this into account, you’ll lose motivation early on and give up before your dropshipping business starts to take off.

2. Not Building Relationships With Your Suppliers

Your suppliers are the lifeblood of your new dropshipping business. At first, your relationship with your dropshipping suppliers revolves solely around product availability and shipping concerns, but you shouldn’t allow this to continue for too long. 

Bear in mind that each supplier has multiple dropshippers to deal with, so in order to ensure that you receive preference when your suppliers’ products are about to run out of stock, try to build deeper relationships with them. It’s crucial to treat your dropshipping suppliers with respect, pay them on time, and work out issues together.

3. Setting Very Short Delivery Times

It’s easy to become so focused on building a solid customer base and start setting very short shipping times. In reality, there are a lot of steps involved in shipping which make it impossible to predict when a package will arrive.

While it is true that lengthy shipping ties could put off your clients, you should refrain from setting unrealistic delivery times that your suppliers won’t be able to meet. Find out from your suppliers the potential delivery time, then provide your consumers a time range that matches that of your suppliers (with a safe margin).

4. Offering Multiple Shipping Fees

If you choose to offer several shipping fees on your website, you will end up with too many options that you won’t be able to manage. All your loyal customers want is that you deliver their products at the lowest price possible. 

There are two approaches to this: either provide free shipment or charge a flat fee for delivery. If you select free shipping, you can change the product prices to account for the shipping costs. Since there won’t be much of a price difference, advertising that you offer free delivery is a good strategy to attract your target audience.

5. Not Having an Efficient Returns System 

Not having a returns system that works is the biggest dropshipping failure. Regardless of how awesome products you sell, at some point, there will be customers that will want to return them. Because you are merely an intermediary, you might believe that the provider is in charge of the refund. This is only partially true. While returns will ultimately be handled by the supplier, it is your reputation that is at stake.

This is why it is very important to ensure that your vendor has established a clear and simple return procedure. You should also monitor returns to ensure that your consumers receive refunds or replacements as soon as possible. 

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6. Relying Too Much on a Single Supplier

If you depend too much on a single supplier, you could run into problems like price increases that reduce your profit margin, late shipments, back-ordered goods, the supplier going out of business, not filling orders, etc.

Utilizing multiple vendors is always a better option. If you’re unable to do that, try to negotiate a contract with your supplier. If possible, make arrangements in advance for pricing, delivery, and other potential problems.

7. Competing on Price

Early on in your dropshipping career, you might get an idea to undercut the competition on price in order to spur more sales. This concept is nothing new but the truth is it only benefits big players like Walmart and Amazon because they already have the shoppers’ trust. 

As a new dropshipper, you should be aware that drastically lowering pricing tends to make potential consumers wary. Deals that seem too good to be true usually are, and cheap costs typically lead consumers to believe they are purchasing substandard goods (even if your product is the same as the competition).

In addition, by doing this, you will reduce your own profit margin. In the end, you’ll need to sell more in order to earn the same amount of money as you would have at the initial pricing. 

The Bottom Line

Dropshipping is a great way for people to start their own businesses and find financial independence. It can help you reach your goals for a fraction of the price of starting a traditional retail business, regardless of whether you just want to experiment to make some extra money or build a full-scale eCommerce operation.

We hope that this blog post covered some of the key concerns of dropshipping for beginners and provided an answer to your question “How to start a dropshipping business?”. Success in dropshipping isn’t always simple or straightforward. However, if you stay away from the 7 mistakes we’ve listed in this blog post, you’ll be able to avoid having to learn some difficult lessons the hard way.

The numerous aspects of an organization are managed through a variety of systems and processes, among which enterprise resource planning (ERP) is one of the most important. However, just understanding how to use ERP software is not enough; integrating it with other business systems is crucial to making sure companies are able to access data easily and streamline their business processes.

Enterprise resource planning integration can be challenging but if you have a complete understanding of what it is and how it benefits your business, you can create an ERP integration strategy that will enable you to overcome the obstacles in your path to success. 

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What is ERP Integration?

An organization can use ERP (Enterprise Resource Planning) software to gather, store, manage, and understand data from a variety of business activities. An ERP is a category of business management software that enables organizations to manage the crucial parts of their business from a single application. 

For instance, apparel ERP software, such as ApparelMagic, integrates all aspects of the apparel business processes including design, manufacturing, distribution, sales, financial, and customer service in order to improve productivity and provide a more efficient workflow. 

The overwhelming amount of solutions and data interaction, however, often causes enterprises to realize the need for integration as they roll out new enterprise resource planning systems. Marketing, inventory management, HR, sales, and customer relationships are just a few examples of other management systems that can be connected through ERP integration.

Thanks to this integration platform’s creation of a single source of truth, employees from all departments will be able to access data from numerous company processes. By improving communication, companies greatly increase productivity and efficiency within their organization. 

Benefits of ERP Integration

System integration enhances the sharing of information and useful insights, enabling business owners and managers to make data-driven decisions with the aim to support business growth. Additional advantages of integrating enterprise resource planning systems with other systems include:

• Data accuracy. Real-time data updates and the absence of unexpected errors caused by manual processes are two benefits of ERP integration. All departments within the company can obtain accurate information utilizing one platform by creating a single, up-to-date interface. This reduces the need to assign a person to manually aggregate and input data into various systems or to navigate through multiple systems in order to find a certain piece of information.
• Improved legacy systems. A company can process an already existing reliable legacy system by integrating and updating it, lowering the price of the new system’s license and implementation.
• More effective decision-making. ERP integration makes sure that the single, common database contains aggregated, current information from multiple systems. Project managers can rest assured that their decisions are based on accurate data. For instance, warehouse managers would lack access to real-time information on inventory levels if sales and inventory management systems weren’t integrated. Without this information, the company can overstock or understock products, which would have detrimental effects like increased inventory costs.
• Reduced employee training. Once your employees have learned how to use ERP software, integrating it with other systems leads to more processes being automated and employees using fewer different platforms, which minimizes the need for training.
• Improved mobility. Employees won’t be trapped in the legacy system thanks to a fully integrated enterprise resource planning software that gives them instant access to data.
• Cost savings. Aggregating enterprise resource planning data manually from a number of different systems is one of the most time-consuming chores since it demands access to every system, as well as close attention to detail. Thanks to ERP integration, data is automatically pooled and made available to all team members, which virtually eliminates manual processes, reduces labor costs, and saves time. Employees can now devote more time and energy to labor-intensive tasks like creating an effective marketing strategy.
• Increased sales. Integrating ERP systems and eCommerce solutions boosts the possibility of turning website visitors into consumers through the use of customer data. This enables management to create marketing plans and promotions that are tailored to the needs and tastes of customers.
• Increased customer satisfaction. Improved client satisfaction. By integrating enterprise resource planning systems, businesses can give their clients more options. In addition, sales representatives have immediate access to consumer data, which facilitates efficient deal closure.

Types of ERP integrations

So, how to use ERP software in conjunction with other systems? There are various enterprise resource planning integration options, which often depend on the requirements and resources of the company. Here are a few types of integrations that can make apparel ERP software even more efficient: 

eCommerce. Enterprise resource planning integration allows companies with online stores to track all incoming orders by connecting their website with in-store systems. When used in conjunction with inventory management software, these systems can keep track of stock levels and guarantee that all orders can be filled. This avoids stockouts and backorders, which can result in unnecessary inventory expenditures like shipping costs and lost revenue.

CRM. By maximizing communication, customer relationship management (CRM) technologies improve a company’s customer service and customer satisfaction. By providing consumer insights, CRM can give your company a competitive advantage over other businesses in the fashion industry. With the use of these insights, management can tailor the customer experiences and raise satisfaction levels. Even if a company already has customer relationship management software in place, ERP integration can improve it even more. CRM integration also streamlines marketing and sales procedures by connecting consumer demand data with supplier solutions.

Project management. The best ERP systems provide project management tools that let companies utilize specialized integration to combine data from many systems for certain projects. A central database can be used to carry out projects of different kinds, be it financial or production-related, giving managers an effective way to track teamwork and guarantee deadlines are met. With regard to managing enterprise projects, this functionality will save time, effort, and money.

Human resources. HR must operate efficiently because it is one of a company’s largest departments. Enterprise resource planning integration can increase an HR system’s capacity to store and exchange information, thus enabling it to perform employee management tasks including onboarding, training, human capital management, and paperwork even more effectively.

Business intelligence (BI). Business intelligence software gathers and analyzes internal data, giving business owners and managers useful insights that can be used to develop an action plan to enhance internal business operations. BI frequently identifies opportunities to add new software or elements to existing processes in order to improve functionality. Project managers and approved users can easily get this information by integrating enterprise resource planning software with BI.

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ERP Integration Guide

ERP integration with other systems is a complex process that needs careful strategy and planning. A wide range of variables, including the company size, the data migration from other systems, and the number of users affect the process’ length and cost. These factors make having a plan essential for an ERP integration to be successful. The following ERP integration guide covers the essential steps you should take into consideration before beginning the process of integration. 

1. Decide which data needs to be integrated 

Analyze the old data to remove any unnecessary information before deciding which data needs to be merged into the new system. It is difficult to overstate the significance of data research at this point because the efficiency of enterprise resource planning directly depends on the data system. To ensure that the data is accurate and thorough, look for the source documents if at all possible. Keep in mind that the integration might not work if the data is inaccurate or filled with errors. Once the data has been verified, create a data integration plan that gathers data and divides it into logical chunks in order to speed up the transition to the new system.

2. Choose the best integration methods 

Decide which integration strategies will be best for your company’s needs. At this point, you should also think about hiring an enterprise resource planning specialist if your budget permits it. The members of your team probably know your company the best, but when it comes to ERP integration, it makes sense to think about hiring ERP specialists to aid with the process. An enterprise resource planning consultant will ensure that all modification and implementation steps comply with your strategy, goals, timetable, and budget, all of which will result in a quicker and easier integration process.

3. Start the integration process

Appoint a person or persons responsible for the integration and make sure all your employees are up to date. Include white papers and checklists in your standard operating procedures that are available to the entire company. Once the enterprise resource planning integration is completed, examine the outcomes in light of the objectives established by the project team during the planning stage and make sure everyone knows how to use ERP software after the integration. 

The Bottom Line

Enterprise resource planning can be of great help when it comes to streamlining a company’s common processes and communication, but learning how to use ERP software on its own isn’t enough. In order to reap the full ERP benefits, you will need to integrate your clothing ERP software with the rest of your systems and applications. 

ERP integration can be beneficial for your company, as it will reduce operational costs, improve business insights, and increase productivity. The tips provided in this post will shed a light on the importance of enterprise resource planning integration and help ensure its success. 

Whether you reach your customers through private label drop shipping, a wholesale directory, a retail store, or an online marketplace, the apparel sector can be a great source of profit. However, as your revenue starts growing and your business data grows along with it, trying to organize all the different aspects of your clothing business can be quite challenging. You’ll need ERP software to assist you in streamlining your daily operations and creating data-driven projections for your business.

In this post, we’re discussing ERP software examples, the benefits of using ERP, and more. 

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How Can ERP Improve Your Business?

ERP software is intended to bring together all of the tools needed to manage a company’s internal and external operations. If the company doesn’t use an ERP system, business owners and executives will have to rely on several programs for different operations, making data migration and data analysis too time-consuming and difficult. With an ERP, your company’s operations will be optimized, and you’ll get the following benefits:

Improved communication

An ERP system collects data from many sources and arranges it according to the users’ needs, acting as a single source of truth. All of the records you need for your operations, from inventory details and staff information to customer files and sales reports, can be stored in an ERP and retrieved whenever you choose. When you and your personnel need to pull files for specific purposes, especially when working together with other departments, this makes communication more efficient and saves time. 

​​Streamlined manufacturing process

Raw materials management is one of the main challenges for apparel businesses. Without an ERP software solution, clothing companies are forced to cope with a number of difficult situations, like ordering surplus materials, which can result in obsolescence, or ordering insufficient amounts of supplies, which can lead to delays in bulk orders. An ERP system will automate the entire manufacturing process by determining the exact quantity of raw materials required, as well as their cost.

Effective inventory management

Keeping track of the stock in your warehouse is critical for the profitability of your apparel business, but it is difficult when you need to do it manually. Enterprise resource planning software can contribute to better inventory management by categorizing items by vendor, price, color, size, style, and other factors. The system adjusts the item order in accordance with demand and fulfillment dates. In addition, it uses special sales processing algorithms in order to provide accurate profit estimations.

Reduced costs

Interruptions and delays in your business operations can harm your company’s reputation and lead to long-term losses. With enterprise resource planning software, you can unify business processes across different departments, making it easy to foresee and recognize issues and come up with quick and efficient solutions.

Improved query management

When production and inventory procedures are automated, your human resource management team and sales team will be able to respond to supplier and customer inquiries more quickly. Members of the customer service department, for example, can quickly and efficiently access client data and resolve issues connected to supply chain management concerns on the go. An ERP system can also help to unify purchase orders and allow online transaction tracking while calculating overall sales and managing delivery dates.

More accurate reporting

Enterprise resource planning solutions include business intelligence tools and machine learning capabilities to help you assure the consistency and accuracy of all the data you save in your centralized database. These enable you to evaluate information, easily identify data discrepancies and generate performance insights using real-time analytics and powerful filters. That way you can easily make the required adjustments to your operations.

Why Do You Need ERP Software

For many growing apparel companies, it’s not a question of whether they need an ERP solution, but when they will need it. As a company grows, the amount of data it generates and the number of data sources that need to be tracked grow along with it. Managing all of that data across numerous systems is expensive, time-consuming, and prone to errors. Here are a few compelling reasons why your company requires ERP software as soon as possible.

• Your existing process is inefficient. If you are frequently moving between software, losing track of all those spreadsheets, or having trouble getting your apps to connect with one another, it’s time to install an ERP system. ERP’s main capability is to seamlessly integrate different functions and bring together various business operations in a single central database. This eliminates the majority of redundant procedures you are doing across many applications and decreases the chance of data entry errors.

• You have outgrown your existing software. If you are processing data in entry-level software designed to hold only a certain amount of data, you will need a more powerful system to do the heavy lifting. ERP solutions are built to store massive amounts of data across a wide range of business processes. Manufacturing, accounting, and customer relationship management are just a handful of these operations. ERP systems provide business owners with the flexibility they need for future expansion and, more importantly, some much-needed peace of mind.

• Inaccurate inventory. Not being able to track your inventory accurately can have numerous negative consequences on your business. For instance, if you keep too much of everything, you’ll run out of storage space, your cash flow will be strained, and long-held things may become damaged or obsolete. If, on the other hand, you store too little inventory, production will be halted, extra costs will be incurred owing to expedited shipping of missing parts, and delivery will be delayed. If you’re having trouble keeping track of your inventory at multiple locations, and it’s affecting your customer satisfaction and bottom line, an ERP system can help.

• Unhappy customers. Customer expectations two decades ago were vastly different than they are today. A dissatisfied consumer is less likely to return, and the absence of repeat business from existing partnerships means you’ll have to work harder on sales. With an ERP system, data is always at your fingertips. Being able to convey progress and make adjustments on the fly is a relationship-builder, so having access to information from a centralized ERP system can be a great plus when it comes to improving customer experience and securing repeat business.

ERP Software Examples

ERP is used in the apparel sector for workflow management, design, garment manufacturing operations, management of materials, distribution, and shipping. An apparel enterprise resource planning software is a central database that keeps track of all corporate procedures and activities. ApparelMagic is one of the best apparel ERP software examples. 

ApparelMagic is an ERP solution specially designed for businesses in the fashion sector. The software is powered by a combination of enterprise resource planning software and product lifecycle management (PLM) and has customer relationship management features (CRM). 

In addition, ApparelMagic offers an inventory management feature that ensures you have enough raw materials for in-demand items at all times. With multi-channel sales and superior costing, the solution helps you increase your profit margins. It also automates the purchasing, raw material management, and manufacturing processes, allowing you to concentrate on other aspects of your business. On top of that, ApparelMagic enables multi-currency accounting to assist you with your global business and eliminate the need to convert statistics and risk numerical errors.

ApparelMagic can work with a wide variety of third-party applications to help you speed up or simplify your wholesale business, financial management, shipping, and other core business processes. A few of these software systems include Shopify, QuickBooks Online, ShipStation, Square, SPS Commerce, etc.

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How to Use ERP software

An enterprise resource planning system is only as good as its users and setup. When everything’s in place, it should be able to support you in your everyday work and ensure that you have access to the data you need at all times. However, in order for your investment to pay off, you must implement it properly. Here are some things to take into consideration when implementing your ERP platform of choice:

• Requirements. The best ERP software is one that meets the needs of your business, not the other way around. When the right match is found, ERP should be a positive engine for business change and give your apparel company a vital competitive advantage.

• Users. Before you adopt an ERP system for your company, be sure that all of your staff are on board and well-informed on how it actually works. It is critical that they receive proper training in order to get the most out of the software and to understand how to use it to achieve the desired objectives. You can accomplish this on-site by assembling employees at a certain location on a set timetable, or you can use an e-learning solution to allow employees to learn on their own time.

• Integration and third-party devices. Another issue to think about is whether the ERP system you’re considering involves the use of third-party devices like barcode readers or POS machines. ApparelMagic is a software provider that offers you the complete package. It has you covered, whether you need an end-to-end solution or an open-core for third-party app integrations. 

• Scalability. You must ensure that the selected ERP system can scale with your business. Is the system capable of supporting your distribution channel or eCommerce in the future? Is it going to help your company compete in the worldwide fashion market? If your ERP system can’t keep up with your company’s growth, it’s probably not the right system for you.

The Bottom Line

Without the right ERP system in place, understanding, anticipating, and managing customer demand can quickly become a daunting task for even the most seasoned apparel industry experts.

ApparelMagic ERP includes all of the key features you need to run your whole garment business. It was created specifically for the fashion sector and integrates all business operations, such as raw material procurement, manufacturing, inventory, sales, and finance. Make sure you sign up for a free ApparelMagic demo, to see how all of the examples we’ve covered  can help your apparel business adopt even more efficient practices.

ERP (enterprise resource planning) is a type of software that companies use to streamline and manage day-to-day activities such as inventory, accounting, procurement, production, etc. ERP systems are now essential for the management of thousands of organizations of all industries and sizes, including apparel businesses. Demand planning, product development, finished product delivery, revenue recognition, cash flow, and other individual processes can be managed with apparel ERP software.

Choosing and implementing an ERP software solution is a major decision with many implications, and it is definitely not something to be taken lightly. This guide will cover the basics of enterprise resource planning and how it relates to the apparel industry. We’re also sharing some tips on how to find the right ERP solution and successfully implement it.

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ERP Solutions for the Apparel Industry

The apparel industry has its own set of challenges, such as lack of real-time management, lack of integration and communication across departments, inventory stock-outs or surplus inventory, and inadequate data security. Even if they’ve worked in other industries, standard software solutions typically fail to solve these pain points for apparel brands.

Some of the most important benefits of implementing ERP software created specifically for the apparel retail industry include greater efficiency as a result of smooth flow of information between departments and access to information in real-time, fewer errors, improved inventory management, better labor tracking, shorter order-to-shipment cycle, and improved accounting control through integrated financials. ERP provides capabilities that can be customized to your individual business requirements, allowing you to address both tangible and intangible savings.

Common Features of Apparel Manufacturing ERP Software 

The first step toward a successful ERP implementation is choosing the right ERP solution. In the apparel industry, ERP is used for apparel design, manufacturing processes, raw materials management, distribution and shipping, and workflow management. ERP fashion software provides a centralized database of all business processes and operations.

Understanding the key ERP features will not only help you understand why this software is so important for apparel companies but also help you select the cloud-based solution that best fits your apparel company’s needs. Here are some of the most important ones to take into consideration when evaluating ERP systems:

Supply chain management. ERP apparel software tracks demand, manufacturing processes, inventory, logistics, and distribution to provide insight into a company’s supply chain management efficiency. Real-time data on a company’s supply chain can assist in detecting inefficiencies and improving inventory management and control. SCM systems can also aid with inventory planning and distribution resource allocation.

Manufacturing. By assisting with product planning, sourcing raw materials, production management, and forecasting, ERP systems help improve the entire manufacturing process. Modules for bills of materials management, assembly management, work order management, product tracking, shop-floor control, and distribution planning, are among the other important components. 

Integration. The fundamental, and perhaps most important benefit of ERP is a centralized view of critical operational, financial, and business data that can be communicated in real-time across different departments. You can expand your options by integrating your ERP system with your warehouse management solution (WMS), your product lifecycle management (PLM) software, or the systems used by your third-party logistics partners and suppliers. 

Automation. Order processing, reporting, invoicing, and other repetitive business operations can all be automated with ERP. Automation cuts down on time spent on manual entries, decreases errors, and allows employees to focus on higher-value tasks.

Customer relationship management. By using an ERP solution with integrated CRM features, all customer-related information is stored in a single database that’s easy to access, including prospect status, contacts, purchase orders, and transaction history. CRM solutions allow businesses to automate tasks such as filling up purchase orders, creating accounts receivable reminders, etc. Marketing and sales staff benefit from ERP solutions with integrated CRM because it makes it easier to sell, upsell, produce purchase orders, predict, manage commissions, and measure crucial information like ratios and profit margins. 

Accounting. Accounting elements in ERP include the capacity to manage and analyze financial data like general ledger, accounts payable, accounts receivable, forecasting, and budgeting. The most robust systems can perform more advanced functions like tax administration and revenue recognition.

Data analysis and reporting. Employees can obtain a wide range of information using data analysis and advanced reporting to get valuable insights, make better decisions, improve company procedures, and detect issue areas. Visual representations, such as graphs, charts, and dashboards, may be included in reports, with the goal of highlighting trends and patterns to improve your entire business performance.

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Implementing ERP Software

Once you have chosen the best apparel ERP, it’s time to implement it. Implementing enterprise resource planning software requires an investment of company resources, time, and money, so it’s wise to have a plan. We’re offering 6 tips that will help you understand the process and ensure a successful ERP implementation. 

1. Assemble an ERP implementation team

Putting together an effective ERP project team will make your job a lot easier. You’ll need the following ‘core’ members to get started: project manager, application developer, application analyst, and QA engineer. 

However, in order to make sure that your ERP implementation runs smoothly across all departments, a couple more persons are required. Depending on who your main stakeholders are and the nature of the ERP solution you’ve chosen, these might include senior management, shop floor personnel, warehouse staff, sales department, and so on. 

2. Draft an implementation budget

According to studies, expansion of the initial project scope was the main reason businesses went over budget during ERP implementation. On the other hand, as of 2020, 40% of ERP implementation projects did not surpass the budget. 

Trying to figure out how much you will need to spend on ERP implementation is difficult, but there are certain expenses you can anticipate. An ERP solution will cost at least one percent of an organization’s gross annual revenue, so keep that in mind. You must also factor in the price of network and hardware upgrades, overtime compensation for employees, customization fees, vendor training, as well as data storage and backups.

3. Begin with data migration

The process of transferring data from its original sources to the ERP system’s database is known as ERP data migration. It frequently entails transferring data from several systems, storage types, and formats into a single, unified structure.

Prior to the ERP implementation, some departments may use general-purpose tools such as spreadsheets, while others may use systems designed to handle only their specific functions, such as human resources or accounting software. Organizations need to adopt a rigorous approach to ensure the success of data migration, which can entail extracting, reviewing, and transforming data from these tools and systems before importing it into the ERP database.

4. Train your employees

User adoption is critical to the success of your ERP implementation. To avoid making typical mistakes and wasting time correcting errors, it’s critical that everyone understands all aspects of the system, and a well-designed user training program is the best way to ensure this.  

There are several methods for training your employees, but the most common is the ‘e-learning’ method. Be sure to keep communication channels open throughout the training period and offer opportunities for trainees to provide feedback that the implementation team will later act on.

5. Deploy the ERP software

This stage includes system testing, determining project metrics, network reliability and speed assessments, and data backup operations, among other things. 

Going live will require an extra workforce to supervise the process and ensure seamless integration. Keep in mind that communication, both with your team and with the rest of the labor force, is of the utmost importance. You will need to be clear on who’s responsible for which task, when it should be completed, and make sure everyone is on the same page.

6. Evaluate the success of your ERP implementation project 

All that remains after your ERP is deployed is to assess whether your implementation was successful. The following are some of the questions you should ask yourself to determine this: Is your return on investment increasing? Is there a reduction in human error? Has the level of consumer satisfaction risen?

It’s important to bear in mind that ERP implementations are rarely a straight line. Although, in theory, the software should meet all of your functional requirements right out of the box, the reality is that in order to achieve all of the business needs, ERP customizations and/or third-party integrations are frequently required.

The Bottom Line

The bottom line is that, in today’s marketplace, ERP solutions are vital for remaining efficient and competitive. When implemented by a company familiar with the challenges of the fashion industry, ERP can lead to an increased ROI, reduced manual errors, improved time management, enhanced employee and customer satisfaction, and decreased administrative and operational costs. 

Selecting an adequate ERP solution for your apparel business can be a challenging and time-consuming process, but it will be well worth your while. A comprehensive, web-based ERP solution delivers end-to-end solutions that can help you stay ahead of the competition, meet all of your company’s short-and long-term objectives, and support business growth.