6 Best Practices for Fashion Inventory Management

6 Best Practices for Fashion Inventory Management

Of all the modern industries in the world, the fashion industry is arguable the one most responsible for the meteoric rise in consumer e-commerce, and the one most advantaged by technology. Clothing, shoes, accessories, and probably makeup rank highly on our list of basic necessities. Together with a sophisticated global mail system, you suddenly have the means to take online orders 24/7 and ship them to customers around the world.

Fashion Inventory Management best practices

And another thing about the fashion industry is the low barriers to entry. You don’t need to scale up and be a big behemoth like ASOS. You can offer your fashion wares at your own Facebook, Instagram, or Etsy shop. Or set up your own e-commerce website with Shopify or WooCommerce. Behind all these efforts, though, is the need to control and manage your fashion inventory.

Inventory management doesn’t rank highly at dinner party chatter but it’s a critical and inevitable part of dealing with physical stock. You need to know how much inventory you have of a product at any point in time, where are they located, and how long does it take for you to turn them over, i.e. sell them. Fashion is fickle after all and you need to bear in mind changes in seasons and trends.

Here we’ll briefly cover the fashion industry before delving deeper into what is required to manage your fashion inventory. Next up we’ll suggest some best practices from our own experience. Finally, we’ll show you how these best practices can be implemented using an order, purchase, and inventory management system such as EMERGE App.

The Fashion Industry First

Whether you’re a denim-wearing dad/mom or an Instagram fashionista, fashion definitely has a part to play in your life. It all depends on how much time, effort and money you want to spend on it. Most people stick to tried-and-true high street labels like Levis, The Gap and Nike for daily casual wear. Others go for upmarket luxury brands with mind-boggling price tags to match. And even more seek out esoteric street labels for those in the know.

fashion inventory management

Regardless of where you are in the fashion industry stakes, everyone needs to manage their inventory somehow. And the plethora of sizes and colors makes the task much more difficult. This means that for every shoe size or handbag model, you ideally need to have several colors in stock. Unless, of course, you have a monochromatic fashion label that only offers goods in either black or white.

And the portability and small size of fashion items make it easy to ship nationally or around the world. Picking and packing items for an order is easy because clothes tend to pack flat, shoes are shipped in boxes, and other accessories can be shipped in regular postal size boxes. And they generally don’t need the same fragile handling care as say a computer monitor or printer that needs to be shipped overseas.

However, similar to the electronics industry, fashion is fast changing and fickle. In fact, there’s a subset of the industry called fast fashion that focuses on cheap, inexpensive threads that are inspired by current catwalk looks. Here today, gone next season. Plus, there are two broad seasons that you need to take care of: spring/summer and autumn/winter.

What is Fashion Inventory Management?

From our experience running a custom t-shirt printing shop for corporate orders, we can attest that fashion isn’t for the faint-hearted. The low barriers to entry mean that anyone can get into it. You don’t even need to have design skills. Today you can find many OEM manufacturers for clothing or bags, for example, and have them tailor designs with your specifications and brand on them.

However, getting your goods out there and marketing them in front of customers is one thing. It’s another thing to manage incoming orders, stock levels, and plan future purchases. In fact, if you have a thing for fashion trends and design, you may not have time to manage the nitty gritty of your fashion business. And it may distract you from running the business.

fashion inventory management - emerge app

In comes inventory management software to the rescue. It’s understandable that most fashion business owners focus on the front-end software that drives their sales and business. This is the retail POS or e-commerce website that lets consumers browse their wares, place orders, and seek help for exchanges and returns. However, unless you’re on an e-commerce platform that handles everything from sales to shipping for you, you will need to deal with fashion inventory.

Similar to any other industry that deals in physical goods, fashion inventory management is making sure that you have sufficient stock of a good at any point in time. The keyword here is “sufficient”. Because we know what happens when you have too little or too much stock. Insufficient stock means stock-outs, irate customers, and the opportunity cost of lost sales. Excess stock means high inventory costs and the risk of dead stock.

Some Best Practices for Fashion Inventory Management

At times fashion inventory management is like parading on a catwalk. You want to make sure that you’re taking confident strides forward (and look good while doing so!). But on the other hand, you don’t want to take a misstep and tumble if you don’t know where you’re heading.

Here are some best practices for fashion inventory management that we’ve summarized from our past experiences and from talking to customers dealing in consumer goods. There are six best practices for a start. They’re not the only best habits around but we found that successful fashion businesses adopt at least a few of these in their everyday operations.

1. Instill Good Inventory Management Habits

Sophisticated order, purchase, and inventory management software such as EMERGE App isn’t enough to manage your fashion inventory for you. We always tell our customers to practice “inventory management hygiene”. This means putting good habits in place and adopting a “right” attitude to managing stock. There’s very little point in investing money into cloud applications, for example, if your staff still insist on saving multiple local copies of their spreadsheets.

This is broadly known as change management. You, the owner, need to start by instilling good inventory management habits from the top down. Call a town hall meeting and explain to your staff why an inventory management solution is essential. Chat with them privately if they show concerns about job redundancy. Explain that technology can help them to do their job faster, more accurately, and free up more time for value-added tasks.

2. Practice Forecasting Inventory Levels

This is a tricky one like the catwalk earlier. You want to make sure that you have just the right amount of fashion inventory at the right time. It’s more of an art form that ebbs and flows with changing fashion trends. It’s also about having a pulse on global fashion and making savvy purchases for future sales, taking seasonality into account.

So forecasting fashion inventory levels means arriving at a reorder point so that you can maintain sufficient safety stock for anticipated sales. In other words, buying just the right amount of stock while considering how fast you sell them and the time it takes to have them shipped and delivered to your warehouse. Fudge your forecasts and you’ll end up with too much stock arriving early, or too little stock arriving late.

3. Count Your Fashion Inventory Regularly

Hey, hang on, I thought you said that inventory management software will help me save time and avoid having to physically count inventory? Well, yes and no. EMERGE App adopts a perpetual system of inventory that shows your available inventory to sell at any point in time. However, you know that with multiple sales channels and warehouses, your fashion inventory will go missing or astray for many reasons.

Hence, you still need to do continuous inventory cycle counts to sync your physical stock together with the stock available for sale in EMERGE App. This is a non-disruptive means of inventory counting that can be done daily for fashion inventory. Look at it as a means of making your inventory records more accurate. And more accurate inventory records means better decision making in the medium to long run.

4. Reduce Your Fashion Inventory Regularly

This is one good habit that we can’t emphasize enough. Keeping fashion inventory means that you’re incurring inventory carrying costs. This is a cost to your business and it includes expenses to store the inventory such as rent, utilities, and warehouse salaries. And other less obvious ones such as opportunity cost, theft, seasonality, and insurance.

Just like a spring clean for your wardrobe, do make it a habit to assess your inventory every 6 months at a minimum. This would be enough to gauge last season’s spring/summer or autumn/winter stock and decide what to do with them. Remember, keeping old stock in valuable warehouse or retail space means not making space for incoming stock.

The first thing to do is to rationalize or trim your SKU count. Do you really need that shade of lilac in every conceivable size? On one hand, fashion inventory dictates that you should have enough stock to satisfy every customer’s whim and size. However, keeping multi-matrix variants also means an increased risk of inventory bloat. Comb through your historical sales data to reduce SKUs that you don’t really need.

Another thing to do is to get rid of dead stock. These include products that have not seen a sale in the past 12 months. That’s a long time in fashion terms. No one wants to be seen in last year’s fashion trend or be caught wearing industrial workwear when the look has clearly blown over. Just dispose of dead stock through deep discounts, bundling, or donations. Trust us, your warehouse and retail space will be all the better for it.

5. Use Barcode Scanning Technology

Barcode technology is a must with fashion inventory management. For most small and medium-sized fashion businesses, the SKU quantity isn’t daunting enough to implement a barcode technology solution. Contrast this with a manufacturer of socks who has to contend with thousands of pairs of socks in different colors, designs, and sizes, for example. And many affordable barcoding solutions come bundled with desktop printers, handheld readers, and barcode printing software.

As we’ve mentioned many times in the past, a barcode printing and reading solution is not an inventory management solution. It’s simply a means of using barcode hardware and software to tags your products with their SKU number or barcode label. Get the labels onto your goods and start using them with your favorite inventory management software, such as EMERGE App. Other than saving time entering the SKU, you can use handheld barcode readers to add items to a sales order or dispatch them before shipping.

6. Deal With Exchanges and Returns Fast

Whether you’re a fashion retailer or wholesaler, returns and exchanges are an inevitable part of your business. In fact, customer expect that they are able to return or exchange fashion items because they don’t fit, they don’t like it, or they changed their mind. And the competitive nature of the fashion industry means that you need to make it painless and cost less for them to do so. Otherwise, customers will simply move their purchases elsewhere.

Similar to dealing with dead stock, you need to manage returns and exchanges fast. Having a clear cut returns and exchanges policy instills confidence in purchasers. They know that they’re able to return or exchange items with no questions asked and at no cost to them. EMERGE App handles returns and exchanges with ease, leaving you to decide what to do with a stock that is returned or exchanged.


It’s safe to say that the fashion industry has underpinned the exponential growth of e-commerce. And that online retail sales have been made possible by web browsers, apps, and the mobile Internet. Underlying all this activity is the basic need to manage and control your fashion inventory levels well. Take your eye off these essential operations and they will eat into your slim profits. So, it’s critical that you manage your fashion inventory well with these six best practices for a start.

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