How much inventory should a new fashion brand carry? Well ideally nothing. However that is not always practical. When I had my first sales manager position and was responsible for placing production orders I always over ordered. I remember my first season we had two sweater groups. Once sold out right away and the other didn’t sell well and I had visions of inventory piling on shelves so high I had nightmares that we would go out of business. Part of the problem was that styles that originally sold well suddenly dropped dead and no one wanted them anymore. Yikes!
You would think I learned my lesson. But in my next job I continued to want to over buy. Thankfully my boss was more conservative and would challenge me to reduce the orders. Over the years I learned to balance my desire to sell to my potential and anticipate needs and be cautious enough to not go overboard. Of course I was never perfect and that is what off price stores are for. To sell excess stock. As long as I didn’t have too much to get rid of at the end of the season my margins were not too impacted.
There isn’t an exact science to buying inventory. There is no formula. You have to deal with factory minimums which might cause you to place more than you want to. If you have a website you will want to have inventory to sell from. But, when you are a new brand you have no history to get a sense of what you may need. The following are what you should think about when opening your line.
- Not every style sells, so as soon as you get an idea of what customers like guide them into those styles and discourage them from buying what isn’t selling. This way you build a cutting ticket and don’t have a bunch of little orders.
- Better to sell out than have too much inventory. Having to say no to a reorder is a champagne problem. This way they may buy more up front the next season
- You may be better served to pay an up charge to buy less units than to have too much.
- Try to manage your SKU count in the beginning. Do you really need to offer 7 sizes in the beginning?
I think you pretty much get the message that in the beginning you should err on the side of too little than too much.