In the retail industry, proper management of inventory is necessary for the success of any business. Merchandise inventory means the cost of goods on hand, as well as that which is available for sale at any given time. A retail business must always have stock at hand for sale. It is not just about availability, but the stock should be in the right quantity, not too little to run out within a short time, and not too large to expire or become obsolete and cause losses to the retail owner (Aro-Gordon & Gupte, 2016). This essay focuses on merchandise inventory in the fashion industry and proposes three techniques that can be used to manage inventory effectively.
One important thing to note about the fashion industry is that changes in seasons and trends impact it significantly. Innovations and styles are always emerging in the making of various clothes or apparel. Therefore, it is effortless for specific fashion trends to be rendered obsolete with time. For instance, in the Victorian era, trench coats and hats were ubiquitous among men, but the style changed over the years. Nowadays, fashion trends are more liberal and give people more freedom to choose what they want. People who stocked trench coats during the Victorian era made huge profits because it was a trend then. However, those who continued to stock up the same type of apparel over the years, and did not realize the changes, made losses. The fashion industry can also be affected by seemingly benign factors such as weather changes and patterns (Shafi, 2014). Heavy clothing sells best during the cold seasons, while warmer seasons need lighter clothing. Therefore, the merchandise inventory implies that people running various fashion businesses risk having too much stock or too little stock, depending on the seasons. Sometimes purchasing too much stock can lead to losses when fashion styles change or evolve.
Delegate your assignment to our experts and they will do the rest.
The first technique in managing merchandise inventory in the fashion retail industry is keeping a record of sales during the different seasons. This technique mostly applies to the purchase of various attires during different seasons. When a retailer has a record of sales in such a case, they will know what kind of clothes sell highest during the different seasons, and in what quantities (Tripathi & Kochhar, 2016). When such a season approaches, the retailer will get the right amount of stock, and can, therefore, balance stock during different times of the year.
Secondly, the fashion retailer can use a ‘flow-in-flow-out’ approach. In this approach, whenever a client demands a particular time of apparel or places an order, the fashion retailer informs the manufacturer to make the apparel (Spragg, 2017). In this way, the retailer acts as a ‘middle-man.’ Most online fashion retailers use this strategy by acting as a link between customers and manufacturers. Some fashion retailers also have tailors or production spaces, where they produce apparel according to the specifications of the customers. The advantage of this strategy is that it cushions retailers against making losses because attires are only produced by order.
Lastly, fashion retailers, especially during high demand seasons, need to have alternative suppliers. That means that proper merchandise inventory management requires having a proper and efficient supply chain. When orders come with massive traffic, it is vital to ensure that customers have their needs satisfied because failure to do so means distrust and loss of faith in the business by the customers (Banerjee, 2019). Therefore, an efficient and proper functioning supply chain is essential in the efficient and effective management of the merchandise inventory.
References
Aro-Gordon, S., & Gupte, J. (2016). Review of Modern Inventory Management Techniques. Global Journal of Business & Management , 1 (2), 1-22.
Banerjee, P. (2019). Analyzing the existing challenges in the buying process of fashion retail industry and suggesting a possible solution using artificial intelligence.
Shafi, M. (2014). Management of inventories in textile industry: A cross country research review. Singaporean Journal of Business, Economics and Management Studies , 51 (1121), 1-15.
Spragg, J. E. (2017). Articulating the fashion product life-cycle. Journal of Fashion Marketing and Management: An International Journal .
Tripathi, V., & Kochhar, P. (2016). Determinants of Effective Inventory Management A Study of Consumer Durable Retailers. Bonfring International Journal of Industrial Engineering and Management Science , 6 (2), 53-58.
