Overstocking and scarcity are two sides of the same coin, which can lead to big financial problems for the brand owner. In this article, we will talk about the concepts of overstocking and scarcity, how to avoid them, and also share tips that will help you get out of these situations with minimal financial losses.

Overstocking is a situation that occurs when there is an excessive amount of goods left unsold on time. Overstocking is dangerous because excess products take up space in the warehouse and this increases storage costs.

Product shortage is a term that means a shortage of goods on the market, in other words, a situation that occurs when demand exceeds supply.

The main steps to take in order to avoid overstocking and shortages:

1. Demand forecasting

Before purchasing clothes, fabrics and other materials from sellers, the brand owner must carefully analyze the current market situation: which products are in particular demand from competitors, what is fashionable and relevant now, seasonality, etc. A detailed market analysis is the main step that will allow you to correctly allocate resources and calculate the number of future products.

2. The use of technology

There are many modern technologies that help predict demand, allowing companies to effectively manage inventory. For example, an inventory management system (EPR) monitors inventory in real time at multiple warehouses and in different locations. With it, enterprises can keep accurate inventory records, as well as analyze how stocks move in a warehouse. It is also worth carefully studying special software that predict demand.

3. Cooperation with suppliers

If there is a shortage at the enterprise and there is not enough goods, then in this case it is necessary to have good relations with suppliers in advance so that they can promptly bring the right goods at the right time.

4. Regular data analysis

Constant monitoring is the key to the success of your fashion brand. Keep track of which items are being bought more and which are not, and what customers are paying more attention to. If you constantly monitor the situation, keep records of sales, you will be able to quickly purchase the necessary goods, make sales to unpopular positions, which will allow you to avoid overstocking and shortages.

5. Monitoring of market trends.

The market never stands still and is constantly changing, so you should definitely keep up to date with the latest developments in your field. Understanding current and future market trends will help companies adapt their strategy to changing demand.

Avoiding overstocking and shortages requires careful analysis of market conditions, flexibility in production and supply management, as well as the use of modern technologies. It is very difficult for a beginner in the fashion business to figure out all these issues in a short time, because you need to have deep knowledge in this area, which is why many aspiring entrepreneurs close after a few years, having failed to succeed.

The command “Fashion Magazin“ has been working in the fashion industry for more than 20 years, we have thoroughly studied the market and know all its pitfalls. Cooperation with us gives an opportunity for a fashion brand to reach new levels, work out the range, DNA and strategy, saving millions of rubles and literally years of your time.

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