Fashion Apparel Inventory Management

The Ultimate Guide to Fashion Apparel Inventory Management

The need for apparel, accessories, jewelry and footwear is growing, with Shopify reporting that sales hit more than $180bn in 2021 in the United States just by itself. What’s more is that sales are expected to increase 13% this year, with shoppers expected to drop a staggering $204.9bn on fashion online. 

That being said, apparel retailers need to be able to move inventory quickly, accurately and efficiently to avoid losses and stay competitive in this expanding industry. If you are a business owner that is manually tracking goods and beginning to scale, then more complexity becomes part of the equation, as well. Then what?

Well, things can get out of control quickly, that’s what. And that is where this inventory management guide is here to help. It will provide an overview of what apparel inventory management is, its importance, and the different strategies and benefits of using software to manage your inventory.

clothes for sale

What is Apparel Inventory Management?

Inventory management is the process of tracking and managing apparel inventory to ensure that it meets the needs of your business. This includes maintaining accurate records of stock, predicting future demand, and ordering new apparel in a timely manner. When this process is applied to the apparel industry, it is called apparel inventory management.

The apparel inventory management process can include everything from raw materials to finished goods, depending on the scope of business operations. Inventory management for clothing can be managed in several ways, including using software, which we will discuss later.

The Importance of Apparel Inventory Management

Proper inventory management is a critical part of fashion businesses of all sizes. Firstly, it ensures that products are available when they are needed and that they are of the highest quality.

Secondly, apparel inventory management is critical for apparel companies of all sizes to stay afloat and keep up with customer demands.

Lastly, good inventory management can help apparel businesses save money by avoiding overstocks and understocks–and by association, lost sales, and unhappy customers.

In some cases, apparel companies might even have to stop production due to a lack of raw materials, which can lead to even more lost sales. In other cases, apparel companies might produce too much of a product, leading to an overstock that needs to be sold at a discount or possibly even thrown away.

Therefore, it is critical for apparel businesses to have a good inventory management system in place to avoid these issues.

Fortunately, once you manage to overcome these apparel inventory management challenges, the rewards can be great. A well-managed apparel business will bring a slew of benefits, such as happy customers, efficient processes, and most importantly, profitability and growth.

carton in a cart

The Challenges of Apparel Inventory Management

As you can probably guess by now, a good understanding of apparel inventory management is critical to success in the fashion apparel industry.

If you are already in the apparel industry, you know there are many challenges associated with managing apparel inventory effectively.

On the other hand, if you are thinking about starting up an apparel or garment business, then know these challenges await you once you outgrow your garage or small warehouse. Yes, it will happen quickly and before you know it!

Some of the most common challenges apparel retailers face include:

  • Inaccurate data: Having accurate and up-to-date data is critical in the apparel industry. Data entry mistakes, missing information, and human error can all lead to inaccurate inventory records. This can result in overstocking or understocking, which can be costly.
  • Stockouts: Apparel businesses need to have the right products in stock at all times to meet customer demand. If a product is out of stock, it can lead to lost sales and disappointed customers.
  • Excess inventory: Too much inventory can tie up working capital and lead to markdowns and clearance sales, which can erode profits. This aspect becomes even more complicated due to the need to maintain stock of current styles while also anticipating future trends. 
  • Apparel inventory is often perishable: This fact means it has a limited shelf life, so things need to keep moving and tracking must be accurate during its journey until it’s sold and is in the customer’s hand (sometimes after that in the case of returns).
  • The fact that inventory must move: Another challenge that apparel retailers face is the need to move inventory quickly from stage to stage, accurately and efficiently to avoid losses and stay competitive.
  • The complexity that comes with growth: Growth is great if you are an entrepreneur, but then you need to figure out how to handle increased inventory and more SKUs. Often, apparel businesses will need to upgrade their technology and processes as they grow to keep up with demand.
man taking inventory

Apparel Inventory Management Strategies

Once you understand the challenges associated with apparel inventory management, you can start to put together plans to overcome them. 

There are more strategies than you can count when it comes to apparel inventory management. But we are going to focus on three apparel inventory management strategies that we think are the most important for apparel businesses today. They include building and scheduling inventory, using images for more efficiency, and automating your data collection.

Building and Scheduling Inventory Reports

Gone are the days when apparel retailers had to wait until the end of the month or quarter to get a handle on what was happening with their inventory. With apparel inventory management software, you can schedule inventory reports to run automatically and be delivered to your inbox as often as you need them.

This capability gives you real-time visibility into your inventory levels, so you can make informed decisions about what to buy, when to buy it, and how much to buy. You can also set up alerts to notify you when certain thresholds are reached, so you can take action quickly to prevent problems.

With apparel inventory management software, you can set up reports to run automatically on a schedule that works for you. These reports can include information like the total value of inventory on hand, slow-moving items, and items at risk of going out of stock.

Using Images for More Efficiency

Another great way to use apparel inventory management software to your advantage is to take advantage of product images.

Product images can be used in several ways to make things more efficient and reduce the chances of errors. For example, you can use them for visual verification when receiving shipments or doing cycle counts. You can also use them to find items in your warehouse or store quickly.

You can also use stellar, appealing images on the sales channels your eCommerce shop is integrated with to pique the shopper’s interest. That way, you’ll get more of them buying and getting your inventory moving.

Automating Your Data Collection

Automating your data collection with handheld devices or barcode scanners can help you speed up your processes and reduce errors.

When receiving shipments, for example, you can use a scanner to quickly and accurately record the items coming in. This information is then automatically entered into your system, so you don’t have to waste time doing it manually.

You can also use scanners for cycle counts and physical inventory. This can help you get the most accurate picture possible of what you have on hand so that you can make better decisions about your inventory.

Benefits of Clothing Inventory Management Software

There are so many reasons why the apparel industry needs an inventory management software system, mainly because it can automate many of the tasks associated with managing apparel inventory. In fact, the right software solution can help businesses save time and money by reducing the need for manual inventory management.

In addition, clothing inventory management software can provide businesses with real-time visibility into their apparel stock, which can help them make more informed decisions about ordering new apparel.

Other benefits of using apparel inventory management software, include:

  • The ability to automatically track and update inventory levels in real-time
  • Improved accuracy of orders
  • Reduced costs associated with errors and overstocks
  • Increased customer satisfaction due to improved accuracy and timeliness of orders
  • The ability to quickly find and reorder items
  • Increased efficiency of inventory management processes
  • Greater visibility into apparel stock levels
industrial sewing machines

Inventory Management Integration Options

Apparel inventory management software should be able to integrate with several other software programs that apparel businesses use. This might include eCommerce platforms, accounting software, CRM systems, and more.

Some specific benefits of integrating your apparel inventory management software with other programs include: 

  • Automating tasks like creating invoices or updating customer records
  • Avoiding errors and duplicate data entry
  • Saving time by automating tasks
  • Getting the most accurate picture possible of what you have on hand

Choosing The Right Inventory Management Software

As the apparel industry continues to grow, so does the need for apparel inventory management software. And with that need comes a wide variety of options for businesses to choose from. It can be overwhelming trying to decide which software is right for your business.

Here are a few things to keep in mind that will help you choose the right apparel inventory management software for your business:

  • Ease of use: The software should be easy for you and your employees to use. It should have a user-friendly interface and be easy to navigate.
  • Reporting: The software should provide you with the ability to generate reports that will help you make better decisions about your inventory.
  • Scalability: As your business grows, you’ll need a software system that can grow with you. Look for a system that is scalable and can accommodate your future needs.
  • Integration: As we mentioned earlier, integration is important. Look for a system that can integrate with the other software programs you currently use or will need to use.

The Breakdown

Apparel inventory management software can help businesses save time and money while also providing them with greater visibility into their inventory. By automating tasks, businesses can reduce the need for manual inventory management.

In addition, apparel inventory management software can provide businesses with real-time visibility into their apparel stock, which can help them make more informed decisions about ordering new apparel.

When choosing apparel inventory management software, businesses should keep in mind ease of use, reporting, scalability, and integration. By considering these factors, businesses can choose the right software for their needs.

Choose N41 ERP Software for Your Business Needs

N41 offers an all-in-one, comprehensive system that includes real-time inventory tracking, ERP system, mobile app, an eCommerce site, PLM integration, EDI, and so much more. With tons of features and modules, N41 can help you with all your apparel inventory management needs.

Additionally, N41 ERP Software is affordably priced and offers excellent customer support. Contact us today at (213) 738‐1010 or request a demo to learn more about how we can help you with managing and tracking your apparel inventory!

Read other articles in the series around Inventory Management:

Inventory Management Guide


What is inventory in apparel?

The number and value of clothing products in stock at any particular moment is referred to as inventory in apparel. Raw materials, work-in-progress, finished items, and merchandise for sale are all included in inventory.

How do you manage clothes inventory?

A software system that records the movement, location, and status of your garment items can help you manage your clothing inventory. A good software solution should let you build SKUs for each product variant, interact with your sales channels and shipping suppliers, automate reordering and forecasting, and produce reports and insights.

What is inventory control in fashion?

Inventory control in fashion refers to the practice of regulating the supply and demand for clothing goods in order to minimize overstocking or understocking. Inventory control entails the planning, ordering, receiving, storing, distributing, and selling of clothing. Inventory control aims to optimize sales, reduce expenses, and meet customer expectations.

How do clothing companies manage inventory?

Clothing firms manage inventory by integrating IT systems with their sales channels, suppliers, and warehouses. These technologies can assist them in real-time tracking of inventory quantities, locations, and statuses. N41 ERP Software offers an all-in-one, comprehensive system that includes real-time inventory tracking, ERP system, mobile app, an eCommerce site, PLM integration, EDI, and so much more.

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