New Downloadable Checklist:  10 Ways Fashion Retailers Can Prevent Inventory Overhang

It’s a major balancing act keeping a healthy cash flow as a fashion retailer, particularly when it comes to inventory.

Does this sound familiar? New items bought to keep up with trends can quickly become outdated, while hundreds of variants of style, size and color can build up quickly behind the scenes – taking up space in the warehouse and trapping valuable cash. Without regular stock counts, it won’t be long before that inventory becomes an obscure and disorganized drain on your finances.

If so, you’re not the only one. As thousands of retail brands struggled to get their hands on enough stock during the e-commerce surge of the pandemic, almost two thirds have found themselves lumbered with excess stock as a consequence – right as the economy takes a significant downward turn and customers aren’t as willing to splash their cash.

Inventory overhang is a huge issue for retailers, with many offering round after round of promotional periods as a way to tackle the excess. Not only does that weaken your bottom line, it damages your position with customers, who will come to expect prices to always be that low. In the last year, big brands such as homeware brand and apparel retailer Joules saw catastrophic excess inventory issues send them into administration. It’s never been more important to learn from their mistakes and grapple with whatever is spilling out from your warehouse, trapping your valuable cash.

Here’s where Inventory Planner comes in. We’ve created a brand new and exclusive checklist: 10 Ways Fashion Retailers Can Tackle Inventory Overhang. It’s packed full of expert-led tips and techniques for fashion and apparel brands to take an informed approach to reducing their oversized inventory, and prevent a costly amount of unmanageable stock from accumulating in future.

With this 10-point checklist, get easy and accessible advice to put into action today, such as the following:

1. Accurately forecast for new products

Buying new products is the bread and butter of fashion brands, but with no solid evidence as to how a new item will perform, many merchants jump into purchasing with a ‘fingers crossed’ approach. With Inventory Planner, new products can be forecasted for using the assortment report and ‘combine sales’ feature. It shows you how new products will perform even before they’ve acquired any sales history, meaning you can prevent excess stock from accumulating even for ‘unpredictable’ items.

2. Stay on top of trends and influencers

Lightning-fast trends that are hot, then ‘not’ within a blink of an eye are one of the biggest challenges for apparel retailers – especially since the rise of social media handed power to consumers, rather than fashion houses, to decide what’s trending. Even if you manage to buy in time, today’s hot-sellers will be tomorrow’s cash-drainers. Trend prediction often requires an acute awareness of your market and a nose for what’s up-and-coming, but trend forecasting in Inventory Planner can also be of powerful assistance. Having the means to adapt quickly to trends, with data-led replenishment reports and easy purchase order creation, will stand you in good stead to meet demand without overbuying.

3. Stay aware of the ‘personalities’ of different sales channels

Don’t make the mistake of assuming all items will sell at the same rate in different locations. A boutique bricks-and-mortar outlet may have different best-selling items to your Etsy store, while your website may bring in more of a certain demographic than your Amazon channel. Rather than have one item understocked in one location and overstocked in another, be flexible with where your wares are stored and balance them accordingly.

There’s plenty more where that came from – and it’s yours for free. If you want to receive the full checklist of 10 ways fashion retailers can reduce inventory overhang, download it right here.

Inventory Planner by Sage allows e-commerce retailers to create a profitable inventory with data-led forecasting and purchasing recommendations. To see how it can transform your inventory planning processes, book a demo today.