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How to Deal with Overstock Clothing? Everything Apparel Distributors Need to Know

The apparel industry is quite volatile and subject to quick change which has especially become the case in the last few decades. Apparel distributors face a number of different issues such as regularly fluctuating costs, risks in the demand forecasting of materials and products, not to speak of the changes in the global economic environment.

apparel

However, one of the most common problems in the fashion industry remains overstock clothing. Companies often have to deal with excess clothing inventory stacked up in their warehouses. Let’s first have a look at the reasons that cause overproduction of clothing for companies:

  • Inaccurate Demand Forecasting: It’s not easy to reach accuracy when it comes to demand forecasting for the fashion industry. Trends change every season and one color that was in high demand for the previous fall might be outdated for the coming one. This is why it’s difficult to accumulate enough sales history and generate a statistically accurate forecast before a given item’s season ends. The life cycles of fashion merchandise are shorter than their lead times which make reordering from the supplier impossible.
  • Unit Cost: The unit cost of the order decreases the price per item. This is another reason why many companies end up having overstock clothing inventory.
  • Increased Demand for Clothing: The demand for clothing seems to be increasing at a really fast pace. If we take only the field of fashion bloggers and Instagram celebrities, being seen in the same outfit twice might have a negative impact on their career.

The problem of overstock dresses can turn into a real vicious circle where large numbers of clothes are heavily discounted harming the company’s bottom line and resulting in overconsuming and eventually, becoming a waste.

What Do Apparel Distributors Do with Excess Inventory?

As already mentioned, overstock clothing is a common thing among clothing retailers this is why, over the years, they have managed to find a few ways of getting rid of it. Though all these ways still have their negative consequences on the business’ budget, there is no other choice other than making use of one of them:

1. Contacting Independent Clothing Stores

Many clothing retailers sell their overstock dresses to independent clothing stores in their area at highly discounted prices. However, if the excess inventory happens to have designer label clothes, they are usually resold at the initial prices (the prices at which the retailers bought them from the suppliers).

2. Holding Discounted Sales

This has been a way to go for many apparel distributors. Selling overstock dresses at a highly discounted price (at least 60% off each piece) is one of the solutions for companies owning a physical store. However, this surely will harm your budget.

3. Calling the Distributors

Another solution that clothing retailers do is calling their distributors to see if they can return the overstock goods. This is rarely possible, especially after a certain time has passed, however, the distributor might have another buyer who wants to acquire the exact items in your excess inventory. It’s important to ask the distributor to have a look at his backorder list.

4. Selling Overstock Clothing on Online Marketplaces or to Liquidation Companies

Many apparel distributors also try to sell their excess inventory on online marketplaces such as eBay, Amazon or Etsy. This is a timely process because it requires product page creation and placement of photographs for each item on the corresponding pages but it can be an effective solution.

Liquidation companies are another alternative way out of excess inventory commotion. Many retailers sell their overstock inventory to companies and organizations that specialize in taking merchandise out of the merchants’ hands. It should be noted that these companies tend to pick the items that they like and buy them at much lower prices. This solution might not be profitable but at least it’s a way to free up space and capital for businesses.

5. Donating

Donating excess inventory to charity organizations is one of the best solutions for the issue. Not only can it get the retailer tax deductions but it can also have a positive impact on the brand’s reputation.

6. Throwing Away

Unfortunately, many companies simply throw away their overstock dresses – this is especially common among hugely famous labels who don’t want their clothes to be spread out everywhere.

However, this not only creates lots of waste but also leaves negative consequences on the company’s reputation.

How Can Intuendi Help You?

It seems that overstock clothing is always going to create problems for apparel distributors but the modern world always comes up with new and innovative solutions for these old issues. One of these solutions is inventory optimization with the help of a machine-learning based forecasting technology.

This is exactly when Intuendi kicks in to provide you with the highest quality software solution for your inventory optimization. Our clothing inventory app is able to calculate accurate demand estimations for a new item in your clothing store by analyzing the data related to current SKUs, collections, item features, and product categories.

Intuendi will provide you with accurate forecasting that is much better and more precise than any data gained by means of the traditional forecasting approaches. The good news is that you won’t have to enter any data manually or select items in order to receive the forecast. Intuendi comes with a completely automated demand forecasting and inventory optimization mechanism. The app will also give you such information as the life-cycle of your product which will help you have a more clear idea about your further possible sales.

With Intuendi’s smart inventory optimization tool, you will be able to avoid overstock clothing or stockouts, or at least the risks will highly decrease.

If you are wondering why Intuendi is the best solution for your clothing business, here are a few reasons to help you make the right decision and go for our clothing inventory app:

  • Experience in Fashion: Intuendi has had multiple clients from the fashion industry who wanted to optimize their inventory and solve their overstock clothing issues. Due to our trustworthy and high-quality products, they were able to overcome these issues and are now enjoying an optimized inventory that doesn’t harm their budget.
  • Elimination of Unnecessary Costs: Using Intuendi’s inventory optimization software you will be able to eliminate lots of unnecessary expenses coming from the supply chain and inventory. This will bring valuable working capital to your company.
  • Overstock Analysis: Intuendi will also optimize your inventory levels and determine the overstock items. This smart software will take into consideration such points as future demand, lead times, desired coverage and available stock thus resulting in reduced inventory costs.
  • Clothing Inventory Spreadsheets: And last but not least, you will always have a clothing inventory spreadsheet at hand that contains all the inventory details you need to know. An organized and easily accessible spreadsheet like this is a huge help in the messy clothing routine.

Solve all your overstock clothing issues with Intuendi and enjoy the profits that the apparel industry can bring in a world of fashion bloggers and people wanting to keep up with the latest trends of every season!

 

June 4, 2019 - intuendi