Product Assortment Strategies: Demand and Profitability

Key Aspects to consider while launching a fashion apparel product

“Sustainability is no longer a fringe issue within fashion but the most defining challenge – and opportunity – of our time.” Another Magazine, 2019 Running a fashion business takes careful preparation and a well-thought-out strategy. It goes beyond simply collecting inventory, and exhibiting and promoting it in order to sell items at a profit. A clothing line business is distinguished by high margins and a straightforward business plan. Clothing line businesses, particularly those involving resale, have lower risks than other industries. In 2018, Consumer Goods Forum and Futerra surveyed over 3,600 adults across Europe and discovered that 78% of people trust transparent brands more and that 90% of corporates have noticed an increase in public interest in transparency since 2017, with this interest expected to rise over the next five years. 1. Vision for Success Successful businesses emerge from a vision to address significant client issues. As a result, finding the essential gaps that have yet to be covered by any new-age clothing brand is one of the most important elements to consider when launching a fashion design firm. 2. Sustainable Fashion Trends According to recent McKinsey & Company (2019) research, internet searches for "sustainable fashion" increased between 2016 and 2019. "Transparency has become an important issue further upstream in the supply chain, with consumers increasingly concerned about issues such as fair labour, sustainable sourcing, and the environment," Business of Fashion said in 2019. Consumers want to support firms that do good in the world, with 66% prepared to pay more for environmentally friendly products. Before purchasing a product, 42% of millennials want to know what is in it and how it is created, compared to 37% of Gen Z". 3. Empowering Self-Taught Designers Despite being self-taught, designers like Vivienne Westwood and Dapper Dan achieved enormous success in the fashion industry. And they began their professions before the Internet. We live in an age of access when anybody can learn to fix an engine or tailor a t-shirt by viewing a YouTube video. 4. Unconventional Paths to Fashion Success Many of the same factors apply to launching a clothing line as they do to starting any other business. What does it cost to get started? When should you seek funding for your startup? What kind of outside assistance will you require to manage the legal, financial, production, and distribution elements of the business? Where and how will you make your clothes? 5. Market Research for Fashion Success Once you've decided on a company niche, perform extensive research on the market size, possible competitors, important vendors, and your target demographic. A thorough grasp of the target demographic is essential for a successful fashion business.  6. Innovative Fashion: Creativity, Cost, and Fit This is possibly the finest arena in which you can apply your fashion skills. It allows for creativity, analytical thinking, and innovation while also constituting your company's distinct value offer. Consider how they can be created at a low cost. Prepare a basic technical drawing and brief your pattern-maker and supplier to ensure that your product has the correct form. Size is another important consideration, as today's clients are particularly concerned with proper fit.  7. Choosing the Right Manufacturer: A Deliberate Process While there is no shortage of apparel manufacturers and distribution partners, selecting the best one should be a deliberate procedure. You could wish to visit the production location, purchase some samples, or meet with the seller in person. Set a budget and attempt to stick to it. 8. Business Excellence Essentials The knowledge and new services provided by the brand to the consumer are the primary requirements for any organisation to achieve a degree of excellence. Given that the clothing/apparel industry is heavily labour-dominated, it is critical for an entrepreneur to have competence in labour management or to hire someone who does. Employing new brains would also result in the generation of unique ideas for the product and the business. 9. Crucial Marketing Mix Because of the market's intense competitiveness, one cannot afford to ignore the influence of marketing. Having your company linked to a very profitable marketing plan would assist your product in getting to the correct spot. For example, if your TG spends a significant amount of time online, failing to develop the business in the internet realm would result in the brand missing out on many prospects. As a result, finding the correct marketing mix is critical. 10. Profitable Pricing Strategy The major goal of an entrepreneur is to earn from the clothing line that has been founded. The final product should be priced with both fixed and variable costs in mind. Fixed expenses include the cost of machinery or rent, whereas variable costs are those that alter over time, such as labour costs or credit card fees. It is critical to remember that the product should be priced so that the profit margins are 30-50% higher than the expenditures associated with it. 11. Error-free fulfilment The order processing system may be automated at each level, which will not only assist in reducing errors but will also soon pay off in terms of improved accuracy and therefore efficiency. You may better understand your unique difficulties and the most effective solutions by speaking with a reputable authority in the field of automation. An automated system will ultimately benefit from improved customer happiness and experience. 12. Stringent Return Processing Establishing clear and uniform return rules and processes for your customers and staff is the first step in integrating return processing with your inventory management system. You should specify the terms, deadlines, and procedures for receiving and processing returns, as well as the costs, reimbursements, and exchange policies. Additionally, make sure your website, purchase confirmation emails, and packing slips make these standards and processes obvious and teach your personnel to abide by them. 13. Returns claims management on marketplaces If a customer is dissatisfied with their purchase, they can request a return (refund or exchange) on the marketplace. The marketplace arranges for the merchandise to be picked up after it has received the return request. 14. Inventory Management One of a company's most significant assets is its inventory. An organization's raw materials and finished goods are the heart of its operations in industries with high inventories including retail, manufacturing, food services, and others. When and where inventory is needed, a shortfall can be very harmful. Inventory can also be considered a liability, even though not strictly speaking in an accounting sense. The danger of spoilage, theft, damage, or changes in demand is higher when there is a big inventory. Inventory must be insured, and if it is not sold in a timely manner, it may need to be destroyed or sold at a discount. Conclusion Young fashion designers nowadays are progressively incorporating sustainability into their practices and designs. Future fashion designers may be expected to research, extend, and innovate on environmental challenges.  FAQs How important is having a clear vision for launching a successful fashion design firm? Having a clear vision is crucial because it helps you address significant customer needs and identify gaps in the market, setting the foundation for a successful fashion business. What are some key sustainable fashion trends and why are they gaining importance in the industry? Sustainable fashion trends include transparency, fair labour, sustainable sourcing, and environmental concerns. They are significant because consumers increasingly want to support brands that prioritize ethical and environmentally friendly practices. Can self-taught designers succeed in the fashion industry in the digital age? Yes, self-taught designers like Vivienne Westwood and Dapper Dan have achieved success. The digital age provides access to learning resources, making it possible for anyone to acquire skills and knowledge. What unconventional paths can one take to achieve success in the clothing line business? Unconventional paths may involve starting with low-risk resale businesses, carefully managing costs, and seeking funding when necessary. Creative solutions are key. What role does market research play in the success of a fashion business, and what should it entail? Market research is vital for understanding your target demographic, competition, and market size. It helps you make informed decisions and tailor your products to customer needs. How can creativity, cost-effectiveness, and proper fit be balanced when designing fashion products? Balancing these factors involves innovative thinking, cost-efficient production processes, and ensuring that products are designed with the correct fit and sizing for customer satisfaction. What factors should be considered when choosing the right manufacturer for a clothing line? When selecting a manufacturer, factors to consider include location, quality, production capacity, and budget. Personal visits and budget adherence are crucial steps. How important is labour management in the apparel industry, and why is it necessary for entrepreneurs? Labour management is critical, especially in a labour-intensive industry like fashion. Entrepreneurs should have expertise in this area or hire competent professionals to ensure efficient operations. What elements constitute a crucial marketing mix for a fashion business in a competitive market? A successful marketing mix should align with your target audience and may include online and offline strategies, depending on customer behaviour and preferences. What pricing strategy should entrepreneurs adopt to ensure profitability in the clothing line business? The pricing strategy should consider both fixed and variable costs, aiming for profit margins that are 30-50% higher than the associated expenses to ensure long-term profitability.

Strategies for Overcoming Supply Chain Bottlenecks

Supply chain bottlenecks may cause havoc and have a disastrous impact on the health of your company. Poor storage techniques, poorly designed operating procedures, unclear inventory standards, constrained resource networks, ineffective personnel, a lack of supply chain transparency, and gaps between supply and demand are a few prominent causes of supply chain bottlenecks. Employing a third-party logistics (3PL) provider may help to eliminate these kinds of inefficiencies while also reducing the amount of time, energy, and expenses associated with supply chain bottlenecks in the manufacturing process. Causes Supply Chain BottlenecksChallengesImpactLack of Inventory VisibilityDifficulty tracking inventory with multiple SKUs and warehousesOrders delayed due to unknown item locationsRisk of not restocking in-demand productsCustomer dissatisfaction due to out-of-stock itemsLost revenue from cancelled ordersReputation damage and potential loss to competitorsPoor CommunicationLack of information on supply constraints and delaysPotential sales loss due to inadequate inventoryOrder issues arising from stock problemsCustomer dissatisfaction and negative reviewsLimited Production CapacityInsufficient labour for order fulfilmentWarehouse space limitationsInadequate technology for procurement and order fulfillmentFalling behind on orders and missing out on potential revenue.Customer dissatisfaction and damage to brand loyaltySlow order fulfillment and negative customer impactInadequate Transportation InfrastructureDelayed shipping from suppliers due to workforce shortagesDelayed shipping to customers due to demand surgesSlow last-mile delivery caused by technology or driver shortagesCustomer wait times increased due to shipping delaysPotential damage to brand reputation and loss of repeat customersProlonged customer wait times and potential loss of business competitiveness Supply Chain Bottleneck Challenges Price Impact of Bottlenecks Materials, shipping, and product prices may increase as a result of supply chain bottlenecks. You'll either have to accept the loss or raise your own pricing to make up for your greater overhead, which may drive away clients. Effects of Congestion on Order Fulfillment We have all undoubtedly encountered this typical form of congestion. The completion of your orders takes longer when your materials are delayed. Longer delivery delays result in dissatisfied consumers. Unhappy clients are less likely to patronise your company again, which costs you money.  Impact of Supply Chain Issues on Customer Satisfaction Customers frequently are unaware of the specifics of supply chain problems. They just know that their order will take longer or be more costly. Unhappy consumers are less likely to make another purchase, refer you to friends, or post favourable reviews, all of which can be detrimental to your business's bottom line.  Consequences of Revenue Loss in Supply Chain You may experience revenue loss due to higher expenses, extended delivery times, and unhappy customers. Lower profit margins, fewer opportunities for business expansion, and future hassles are all consequences of lost income. Supply Chain Bottleneck Solutions Diversify Suppliers for Resilience It is wise to diversify your supplier base to lessen supply chain bottlenecks. You may reduce the risk associated with potential supplier-related interruptions by not depending too much on one source. You may be confident that you have backup sources in case your main provider experiences problems like production delays, quality concerns, or unexpected shutdowns by identifying and certifying alternate suppliers.  Buffer Inventory: Supply Chain Insurance Keeping safety stock or buffer inventory is similar to having a supply chain interruption insurance policy. You may develop a cushion that can absorb shocks from unforeseen disruptions by retaining an excess supply of essential components or goods. Buffer inventory makes sure that you can keep running without the risk of stockouts or production halts, regardless of whether there is a spike in demand, a scarcity of supplies, or transportation delays. Accurate Demand Planning Planning and anticipating the demand accurately is essential for avoiding supply chain bottlenecks. You may align your production and inventory levels with anticipated demand by routinely revising your projections to reflect shifting market circumstances and client wants. This alignment reduces the possibility of excess production or stockouts, assisting you in keeping a productive supply chain. Supply Chain Agility Agility is crucial for preventing bottlenecks in the hectic business world. By using agile manufacturing practices, you may swiftly modify production schedules and product configurations in response to changing demand. Because of its agility, your supply chain is less likely to have supply chain bottlenecks since it can swiftly adjust to changes in demand or supply circumstances. How E-commerce can overcome supply chain disruption TopicDescriptionBenefits/FeaturesCentralize InformationClean and reliable data is crucial in the complex logistics industryOvercome overproduction and shortages due to incomplete supply chain informationMeet customer demands for seamless omnichannel experiencesConsolidate data from all partnersEstablish a single source of truth for informationBetter Product Information ManagementImplement a Product Information Management (PIM) systemGain real-time visibility into supply, capacity, and inventoryEnhance supply chain transparency and teamworkImprove overall corporate performanceDistribute accurate information through all mediaEliminate data silosIncrease supply chain visibilityOrder ManagementUtilize an Order Management System (OMS)Simplify the buying process for customers and streamline order, inventory, and returns managementIntegrate with various sales channels, POS systems, and accounting systemsEnable easy management of returnsManage orders from multiple sales channelsAutomatically route orders to warehouses and distributorsStreamline order confirmation and fulfilment workflowWarehouse & Inventory ManagementMaintain real-time inventory visibility across channelsStreamline fulfilment with picklists, pack lists, and custom allocation optionsSet minimum and maximum inventory levels with customized alertEfficiently manage inwards, stock adjustments, and transfersHandle customer returns and RTO efficiently Integrate with 3PLs, and vendors, and offer an audit trail.Warehouse Management System (WMS)Gain visibility into the entire inventory and supply chain operationsCoordinate and optimize resource usage and material flowsRespond to omnichannel demands with quick and efficient warehouse management softwareMaximize labour, space, and equipment utilizationSupport distribution, manufacturing, and service businessesEnable buy anywhere, fulfil anywhere, return anywhere capabilities Conclusion Poor storage techniques, poorly designed operating procedures, unclear inventory standards, constrained resource networks, ineffective personnel, a lack of supply chain transparency, and gaps between supply and demand are a few prominent causes of supply chain bottlenecks. Unhappy clients are less likely to patronise your company again, which costs you money. You may be confident that you have backup sources in case your main provider experiences problems like production delays, quality concerns, or unexpected shutdowns by identifying and certifying alternate suppliers. Because of its agility, your supply chain is less likely to have bottlenecks since it can swiftly adjust to changes in demand or supply circumstances.  FAQs What are supply chain bottlenecks and why are they problematic? Supply chain bottlenecks are points of congestion or inefficiency in the supply chain that can disrupt the flow of materials and products. They are problematic because they can lead to delays, increased costs, and unhappy customers, ultimately impacting the health of a company. How can diversifying suppliers help mitigate supply chain bottlenecks? Diversifying suppliers reduces the risk of disruptions caused by a single source. By having backup suppliers, a company can continue operations even if the main supplier faces issues such as delays or quality concerns. What is the purpose of buffer inventory in supply chain management? Buffer inventory acts as insurance against supply chain interruptions. It provides a cushion of extra stock to absorb shocks from unforeseen disruptions, ensuring that operations can continue without stockouts or production halts. How does accurate demand planning contribute to preventing supply chain bottlenecks? Accurate demand planning aligns production and inventory levels with anticipated demand. By regularly revising projections based on market conditions, a company can reduce the risk of overproduction or stockouts, maintaining a productive supply chain. What role does supply chain agility play in avoiding bottlenecks? Supply chain agility allows companies to quickly adapt to changing demand or supply circumstances. Agile manufacturing practices enable swift adjustments to production schedules and product configurations, reducing the likelihood of bottlenecks in the supply chain.

How to Reinventorize Order Cancellations

There are some things you simply cannot avoid when you first launch your e-commerce firm, and no matter how flawless your entire warehouse operation is, returns and order cancellations still occur. Whatever the cause, you must always be well-equipped to deal with refunds and cancelled purchases. There are certain actions you must take to ensure better order management and boost the overall efficiency of your warehouse operations in order to be ready for such circumstances. Once these fundamental policies on returns and order cancellations have been set, you must provide your warehouse with the necessary tools to process returns more quickly, smoothly, and effectively. Returns must be handled carefully, therefore you need a strong returns management system that automates processes, provides real-time updates, monitors each return, examines the causes of returns, and does much more for all sort of order cancellation. Cancellation of order is indeed a challenge that needs to be managed efficiently in E-commerce business. E-commerce cancellation rate is an important indicator when it comes to cancellation of orders. An agile supply chain responds efficiently when they heat that the ordered is cancelled. Return of Product Types Marketplace Orders The e-commerce warehouse management system (WMS) in charge of your complete business is updated through market API and an RTO is started in the case of marketplace-oriented order cancellations. Instant Replacement Process: When a return request is submitted in this form of return, a replacement order is instantly established and the new SKU is mapped against the old one. The returned item is received when a courier manifest is signed. Instant replacement is indeed a remedy to the order cancellation challenges. Differentiated Return Mapping: In contrast to the first procedure, the new item to be provided in this return type is mapped against the old one without attention being paid to the item to be returned. SKU Mapping After Return Confirmation: A new order for the same item is made with a new SKU against the old SKU only after a courier manifest with a return confirmation has been signed when a return request of this sort is raised. Order Cancellation and Refund Process: With this procedure of order cancellation, the transaction is completely cancelled rather than a replacement for the returned item being given out. In this case, the entire order cancellation happens when the returned item is received and a refund is started. Website Order Returns The method of returns changes to CIR, or customer-initiated returns, if you sell from your own website and choose the Direct to Consumer option. In this way, returns are updated through the API of your shipping provider.  Returns may be picked up by logistics partners using the CIR method, and the seller can update the information in each partner's order management system. When a buyer delivers a goods back to the vendor and mails thorough return instructions, they are using a less common form of CIR. Order Returns directly to the Warehouse You must be completely informed of some of the inclusion and additional costs associated with choosing to send your returned item back to your warehouse as well as any particular steps that might need to be taken.  In such cases, the order cancellation is often opposed to returned and is stored in the same manner as it was sent out initially after undergoing another quality check.  In the long term, using all these different techniques and jobs might help you get better outcomes and reduce your costs, but managing them all at once can be difficult, especially if you rely on physical labour. But with the proper returns management tools on your side, which provide total work automation, you can drastically increase the pace of each procedure, provide better services to your clients, and boost the growth of your eCommerce company. Restocking levels in WooCommerce Store Accurate inventory counts are very crucial if you want to sell tangible goods through your WooCommerce site. Knowing how many t-shirts you have on hand may help you decide whether to replenish speciality goods following a significant sale. With WooCommerce, keeping an eye on stock levels and tracking sales is simple. Part-1Plugin for Order Cancellation ManagementPlugin by WooCommerce automates cancellation updates.Install the  WooCommerce Cancel Abandoned Order Plugin.Activate it.Once a customer cancels an order, stock levels will automatically adjust.Part-2Restocking by WooCommerceSee the Configuring WooCommerce Settings > Inventory Section.WooCommerce > Settings > Products > Inventory When you run a large woocommerce business with a lot of inventory or when processing a lot of orders, automatic re-storage of order cancelled/refunded orders may help you save time. When an order cancellation or return happens, WooCommerce Auto Restore Stock will automatically replenish your stock. When the status of the order changes from on-hold, processing, finished, to either order cancelled or refunded, the inventory/stock restoration is triggered. When WooCommerce Auto Restore Stock replenishes the stock, it will also add order notes to the relevant order to reflect the updated amounts and to highlight that the stock was replenished. Conclusion There are certain actions you must take to ensure better order management and boost the overall efficiency of your warehouse operations in order to be ready for such circumstances. Once these fundamental policies on returns and cancellations have been set, you must provide your warehouse with the necessary tools to process returns more quickly, smoothly, and effectively.  When a return request is submitted in this form of return, a replacement order is instantly established and the new SKU is mapped against the old one. In this case, the entire order cancellation happens when the returned item is received and a refund is started.  In the long term, using all these different techniques and jobs might help you get better outcomes and reduce your costs, but managing them all at once can be difficult, especially if you rely on physical labour. When you run a large woocommerce business with a lot of inventory or when processing a lot of orders, automatic re-storage of order cancelled/refunded may help you save time. What happens when an order is cancelled?When an order is cancelled, the transaction is reversed, and the customer typically receives a refund. It's essential to check the specific cancellation policies of the platform or seller, as some may have restocking fees or specific conditions for refunds.Which ecommerce platform provide instant replacement?Not all ecommerce platforms provide instant replacements, but some like Amazon and eBay have efficient systems for quick replacements. Ensure to review the policies of each platform to understand their replacement processes and timeframes.Does order cancellation affect the reputation of the seller?Yes, order cancellations can impact the reputation of a seller. Excessive cancellations may lead to negative reviews or ratings, affecting the trust customers place in the seller. Maintaining clear communication and fair cancellation policies can help mitigate these effects.What is the relevance of ecommerce cancellation rates?Ecommerce cancellation rates are crucial metrics for sellers and platforms. High cancellation rates may indicate issues with product availability, customer satisfaction, or order processing. Monitoring and analyzing these rates can help businesses refine their processes and enhance the overall customer experience.How can One  enhance order management and warehouse efficiency for better preparedness in handling returns and cancellations?One can implement fundamental policies on returns and cancellations and equip the warehouse with necessary tools for streamlined processing.What happens when a return request is made in the form of a replacement order?An instant replacement order is generated, and the new SKU is mapped against the old one.How does the process differ when an entire order is cancelled due to a returned item?The entire order is cancelled upon receiving the returned item, and a refund process is initiated.What are the long-term benefits of employing various techniques for order management and cost reduction?Employing diverse techniques can lead to improved outcomes and reduced costs in the long run.How can I handle the complexity of managing multiple techniques and tasks simultaneously, especially with reliance on physical labor?It can be challenging to manage various techniques at once. Consider automation, especially for large WooCommerce businesses with extensive inventory or high order volumes.Can you provide examples of necessary tools for processing returns efficiently in a warehouse setting?Necessary tools may include barcode scanners, inventory management software, and efficient sorting systems.Are there specific guidelines for setting fundamental policies on returns and cancellations?Yes, ensure that policies are clear, concise, and cover key aspects such as return eligibility, timeframes, and refund procedures.How can I ensure that cancelled/refunded orders are automatically re-stored to save time?Consider utilizing automated systems or integrating plugins that facilitate seamless order re-storage.Are there any recommended best practices for managing inventory in a large WooCommerce business?Implement a robust inventory management system, conduct regular audits, and prioritize accurate product categorization.What steps can I take to minimize errors and streamline the returns process in my warehouse operations?Provide adequate training for staff, use reliable tracking systems, and establish clear communication channels with customers regarding return instructions.

Optimizing Profitability through Strategic Inventory Allocation

Inventory can take numerous forms, including finished items, components of unfinished products, such as nuts and bolts, and raw materials like steel and wood. Inventory allocation is concerned with strategically distributing and tracking these SKUs across a company's network, such as physical storefronts, warehouses, distribution centres, and factories. Inventory allocation, which is based on real-time tracking and analysis of inventory levels and customer demand estimates, opens the way for supply chain efficiency and the numerous cost savings that come with it. Importance of Inventory Allocation in Inventory Reasons for Inventory Allocation in EcommerceChallengesBenefitsAvoiding OverstockingCapital tied up in excess inventoryCosts: COGs, loans, carrying costs, opportunity costRisk of damaged or expired productsEfficient use of storage space and capital Cost savingsPreventing product depreciationPreventing Under-Stocking and OversellingStockouts and customer frustrationLoss of sales and brand imageUnfulfilled ordersEnsure product availabilityAvoid loss of sales and customersPreparedness for promotional eventsStreamlined Multichannel ManagementComplexity in managing multiple sales channelsRisk of order interruptionsInventory tracking challengesEfficient allocation across channelsReal-time inventory trackingOrder fulfilment continuityFaster Shipping and Lower CostsHigh shipping fees for the wide customer baseInefficient shipping routesReduced shipping costsFaster shipping speedsEnhanced customer satisfaction Factors Affecting Allocation Inventory Demand Forecasting Important for meeting distribution channel demandsBusinesses have the right inventory levelsUsing data on customer purchasing behaviourAnticipate demand data based on historical data Inventory Availability Important to ensure products are near shipping addressesAvoid fulfilment issuesSaves time through inventory tracking technology Allocation Rules Align with overall inventory management systems like FIFO, LIFO, etc. Lead Time in Allocation Duration for Inventory to reach its destinationEnsure timely and accurate delivery Inventory Data Monitor inventory details, location, and availability for salesAccuracy through automated inventory management software Warehouse Availability Warehouse space availability and pricing are evaluatedStorage and Fulfilling orders from homePartnership with 3PL logistics provider for efficient storage and fulfilmentVariation in storage charges per order Challenges of Inventory Allocation Without the correct technology and methods, inventory allocation may be extremely difficult. Without real-time inventory insight, every choice you make regarding storage, reordering, and manufacturing may become a guessing game. Without understanding the inventory assigned for future demand fulfilment, you risk having the wrong amounts allocated to the wrong locations or channels, resulting in unnecessary carrying costs. No system can anticipate every change in customer demand, potential bottleneck, or inventory constraint that might affect the allocation process. Natural catastrophes, political upheavals, and other unforeseen occurrences can halt production, delay transportation, and damage warehouses. You must have contingency plans in place to cope with such situations. Methods of Inventory Allocation Allocation MethodWhat is it?ExamplesPull AllocationInventory is sent based on customer demand, minimizing excess inventory and storage costs.This can lead to challenges if demand suddenly changes.Used by companies with speciality products or for repairs.Specialty product sellers, and repair part suppliers.Push AllocationInventory is sent based on demand forecasts, creating product demand. Relies on forecasting accuracy. Used by retailers stocking up on seasonal items in advance.Retailers preparing for back-to-school season, manufacturers.Just-in-Time AllocationCombines push and pull methods to maintain minimal inventory while meeting demand.Manufacturers keep raw materials but wait for demand to produce. Restaurants prepare food upon order.Manufacturers, restaurants (with some safety stock considerations). A Study on Hierarchical Ad Inventory Allocation Framework Challenges in Ad Impression Allocation Challenges in Ad Impression AllocationImpact on EcosystemComplex research issue for publishersAllocation among diverse advertising models with different trading mechanismsCoupling relationships with other strategiesInfluence on pricing, information disclosure, and other publisher strategiesImpact on downstream playersInfluence on demand-side platforms (DSP) and advertisers' bidding strategiesNeed for a novel frameworkRequirement for a new framework to aid rational ad inventory allocation decisions in PA markets Challenges in Ad Impression Allocation for Publishers Publishers face three key challenges: uncertainty, scarcity, and diversity.Uncertainty arises from unpredictable user visits to publishers' landing pages.A limited supply of ad impressions compared to advertisers' high demand.Diverse ad inventory selling models, including real-time bidding (RTB), private marketplace (PMP), header bidding (HB), and offline contracts.These challenges increase the complexity of ad impression allocation decisions for publishers.Allocation decisions impact both individual revenues and market-wide supply-demand balance.Ad impression allocation is critical in programmatic advertising (PA) markets. Programmatic Advertising Growth and Evolution Explosive growth in programmatic advertising (PA) in display advertising markets.In the USA, PA spending reached $32.56 billion in 2017, capturing 80% of the online display advertising market.In the UK, over 75% of online display advertising spending was programmatically traded by the end of 2017.In China, the PA market was $11.69 billion in 2017 and is projected to grow to $29.6 billion by 2019.PA driven by big data user profiling and precision bidding techniques.Shift from traditional models to fine-grained, real-time ad impression trading.Facilitates precise ad-audience matching and efficient allocation of ad resources for improved market performance. Conclusion A sales season's allocation will make or break the allocation concept. Each location must have the proper amount of each product (and warehouses must have adequate safety stock to cushion demand fluctuations). Customers will not buy things that are not available, and they will not buy more than they require. As a result, merchants must precisely predict sales demand for a certain SKU at each sales location. Retailers use several allocation strategies to prevent the costly implications of improperly allocated inventory. FAQs How to allocate freight to inventory how to allocate freight to inventory? To apportion your freight charges, you must first calculate them. To calculate the landed freight charges, multiply the prepaid freight amount by the direct transit cost. A transportation management system (TMS) makes allocating freight expenses to inventories easier. What is inventory allocation in the context of supply chain management? Inventory allocation in supply chain management refers to the strategic distribution and tracking of various inventory items, including finished products, components, and raw materials, across different locations within a company's network, such as warehouses, distribution centres, factories, and physical stores.  Why is inventory allocation important in ecommerce businesses? Inventory allocation is crucial for ecommerce businesses because it helps prevent overstocking and under-stocking of products. What factors affect inventory allocation decisions? Several factors influence inventory allocation decisions, including demand forecasting, inventory availability, allocation rules (e.g., FIFO or LIFO), lead time, accuracy of inventory data, warehouse availability, and variation in storage charges. What challenges are associated with inventory allocation? Inventory allocation can be challenging without proper technology and systems. Without real-time visibility into inventory, decisions about storage, reordering, and production may become guesswork.  How does inventory allocation contribute to cost savings in supply chain management? Efficient inventory allocation helps businesses reduce costs by avoiding overstocking, optimizing storage space, preventing product depreciation, and minimising shipping expenses.

Cost-effective Strategies for Clearing Obsolete Inventory 

Having adequate inventory to fulfil demand is generally a top priority for most ecommerce firms. Even while it's usually a good idea to keep some emergency supplies on hand (or to handle an unforeseen rise in demand), buying too much inventory might put your company in danger of holding a product that loses value before it's sold. Holding on to purchasing inventory that is no longer sellable, often known as outdated inventory, can drastically affect your bottom line. A product that has reached the end of its lifespan is referred to as obsolete inventory. It occurs when a company believes it is no longer sellable or useable and will most likely not sell in the future owing to a lack of market value and demand. Inventory items often become outdated stock when a particular time period has elapsed and they have reached the end of their lifetime. Causes of Obsolete Inventory So, if you're having trouble determining what's causing your inventory difficulties and/or reducing excess and obsolete inventory quickly enough, chances are it's a mix of variables and symptoms. In an aftermarket service parts company, there are many more reasons for excess and outdated inventory than in a manufacturing organisation. Challenges in Service Demand Demand in the aftermarket is influenced by a mix of product, process, and behavioural variables that cannot be forecast precisely in advance. As a result, projecting demand for service components is far more difficult than estimating demand for a manufacturing operation. Special skills, methods, algorithms, and procedures tailored for a service parts environment are thus required. Off-the-shelf systems designed for retail or production applications are inadequate and will result in excessive or insufficient inventory. Managing Slow-Moving Service Parts A "long grey tail" of slow-moving service parts characterises aftermarket service parts ecosystems as well. Some industry settings are more hazardous than others. Many companies make the error of attempting to estimate demand for extremely slow-moving commodities when the demand pattern is unpredictable. It is often preferable to manage the inventory of slow-moving parts in a completely different manner and avoid attempting to estimate their demand entirely. Stocking Policies for Varied Service Parts Of course, aftermarket repair parts settings comprise not only slow-moving components but also fast-moving and medium-moving parts. Faster-moving components are easier to anticipate, quicker to get from suppliers, and might have a variety of additional characteristics. As a result, they should have a separate stocking policy for slow-moving commodities.Similarly, high-cost components should be stockpiled differently than low-cost ones, and large bulky parts should be stockpiled differently than tiny parts. Service Part Selection Not all of the parts and components utilised in production should be converted into service parts and sold as replacement spares. Experience and product knowledge, as well as prior service parts history, should tell you which components wear out or fail and must be replaced. Even so, whether a higher-level assembly or the components that comprise the assembly should be sold as a replacement service part is a business choice. Sales and Marketing Campaigns for Excess Inventory Requesting that your sales and marketing teams execute a campaign to sell off excess or outmoded products may be a highly effective means of getting rid of issue inventory.Unfortunately, far too many firms execute sales promotions just to increase sales, with little regard for the inventory implications. As a result, sales teams purchase more inventory than usual to stock up ahead of their campaign, only to fail to sell as much as they wish owing to overly optimistic campaign planning. Identification of Obsolete Inventory StrategyDescriptionBenefitsAnalyzing Sales DataReview historical sales data.Identify low sales volumes, declining trends, or high unsold inventory.Use tools like reports, and trend analysis.Adjust inventory levels.Stay updated on market trends.Prevent obsolete stock.Reduce excess inventory.Stay competitive.Monitoring Product Life CycleTrack stages: Introduction, growth, maturity, decline.Identify products nearing obsolescence.Adjust inventory levels accordingly.Review sales data, trends, and competition.Prevent obsolete stock accumulation.Stay ahead of market shifts.Regular Inventory AuditsConduct physical inventory counts.Focus on low turnover, high unsold, or end-of-life products.Use automated tracking systems.Gain insights for improvement.Identify discrepancies.Adjust inventory proactively.Improve management.Minimize obsolete inventory risk.Communication with Suppliers and CustomersStay in touch with suppliers for the latest products.Communicate with customers for preferences and trends.Implement just-in-time strategies.Build strong relationships.Gather feedback.Access up-to-date products.Adjust offerings based on feedback.Optimize inventory management.Build strong relationships. Managing Obsolete Inventory Regardless matter how hard organisations strive to get rid of outmoded inventory, most will end up with at least a few products they can't sell. When that occurs, here's what they can do with that stock, in order of what's likely to provide the highest financial returns: Optimizing Sales Strategies If the things still have a good chance of selling, reconsider how you arrange them. This might involve relocating them in a shop or on a website, or emphasising them in marketing communication to customers. Businesses should also experiment with alternative channels; for example, if specific things aren't selling in-store, advertise them via social media or online ads that direct customers to the ecommerce site. Effective Promotions Promotions are a tried and true method of moving things that aren't selling as rapidly as intended. While this may reduce profit margins, it provides a greater return on investment than the alternatives indicated below. Start with a little discount and then increase it until the product begins flying off the shelves. Bundling for Slow-Moving Inventory Items that do not sell well alone may fare well as part of a bundle. Selling a core item together with two or three related, low-cost extras might assist you in getting rid of slow-moving or superfluous items. To stimulate sales, price the bundle cheaper than the cost of purchasing all three goods separately. Liquidation for Excess Inventory Most sectors have liquidators that acquire excess goods at a deep discount and resell it. If you tried retargeting, discounting, and bundling and didn't sell enough stuff, this is an excellent choice. While the amount paid by liquidators may be at or below cost, it is still preferable to write off outmoded goods as a loss. Donating Surplus Inventory to Charities Businesses may be allowed to donate surplus merchandise to charities. This is not only preferable to disposing of the materials, but it may also qualify organisations for a tax benefit equal to the cost of those products. This choice is more applicable to merchants and wholesalers who sell completed items than to manufacturers or suppliers who work with raw materials. FAQs How to get rid of obsolete inventory? To get rid of Obsolete Inventory you can sell them, bundle them with other products, liquidate them, or donate to Charity. How to identify obsolete inventory? You can identify obsolete inventory by Analysing sales data, Monitoring product life cycle, Regular Inventory Audits, and Communication with Suppliers and Customers. How to reduce excess and obsolete inventory? To reduce excess obsolete Inventory you can Consign your product, Divert it to new products, Scrap it, or Trade with industry partners. How to write off obsolete inventory? The cost of no-value inventory items is removed from the accounting records by writing off inventory. Inventory should be written off when it becomes outdated or when the market price has decreased below the cost reflected in the accounting records.

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10 Festive Season Best Practices To Stop You From Over-Ordering, Stocking Out, And Losing Orders

To fulfil this potential record-breaking level of client demand, it is essential to have the right inventory festive season best practices on hand. The pandemic made us all into supply chain management experts in our living rooms, and it is simple to understand how the numerous issues generating delays and shortages may affect the winter vacations. A substantial portion of the retail industry is impacted: According to the NRF research of CEOs, 70% have seen delays that have lengthened supply chain deadlines by two to three weeks, and 85% are struggling with inventory shortages. 1. Optimizing Inventory Forecasting: Businesses must utilise dynamic demand planning formulas in situations like these to precisely forecast inventory requirements and calculate the appropriate quantities of replenishment.Using historical demand data and sales projections, demand planning calculates replenishment by taking into account schedules, availability, delivery speed, and lead times. 2. Analyzing Past Holiday Sales: To understand the future, you must first understand the past. Start by bringing up all of your historical holiday sales reports from the last few years. Use the data to ascertain your top-selling items, the number of units sold, and the start of the holiday shopping festive season best practices. This will make it simpler for you to determine what you need and how many units to order. 3. DTC Trends: Festive Season Best Practices After building your foundation with historical data, the time has come to include the most recent DTC trends. You may adjust forecasts this way to more accurately represent actual demand. Excel is frequently used by merchants to forecast demand, which explains why so many of them err. Unfortunately, this manual process is tedious, time-consuming, and prone to human error. 4. Managing Holiday Inventory With Audits: You'll require frequent inventory audits to make sure your inventory is accurate if you don't have real-time inventory management. This is especially useful before the holidays so you can manage your festive season best practices demand better and avoid selling items you don't truly have in stock. These inventory mismatches frequently result from stolen commodities, improperly completed purchase orders, and broken goods that are not properly written off. 5. Optimizing Data Accuracy: The formulae and engines that generate forecasts must be fed with correct and current data. Because of this, ensuring that incoming procedures are excellent is crucial to ensuring that inventory management operates at its peak. Unbelievably frequently, the whole incoming process or significant portions of it, are managed on spreadsheets. Everything further along the line will be impacted, for instance, if receiving systems are ineffective or unable to ensure close to 100% correctness. When a picker subsequently seeks to fill a client order for three brushes, they will only discover two in the trash since a receiving colleague marked three purple toothbrushes on a spreadsheet when only two were really delivered. From there, the systems and the client encounter degrade much further. 6. Inventory Visibility For the Holiday Season: Companies with warehouse facilities want to think about putting money into inventory visibility. This enables users to view their inventory's quantity as well as its location inside the warehouse or transportation path. Inventory visibility throughout the holiday festive season best practices makes sure that all channels accurately display the goods that are available for purchase. Additionally, it aids in improving the accuracy of demand planning so that supply levels can accurately represent current demand. 7. Proactive Supplier Communication: The Christmas festive season best practices can often see a rise in client demand, which can make it more challenging to communicate with suppliers. This is why it would be wise to get in touch with them as soon as possible.You should enquire about potential lead times while speaking with your suppliers. The lead time will help you decide how much stock you should order in advance more wisely. It also offers information about deadlines. 8. Navigating Supply Chain Challenges For Profitable Customer Service: Labour, part, and supply shortages, shipping delays, and price increases plague supply chains. Customers demand more quickly and for a lower price. Whether there is a Christmas rush or not, that creates a challenging environment. In fact, the NRF poll revealed that free shipping and free returns are the most popular online services among consumers. How can your company provide services profitably? Efficiency in inbound procedures will result in efficiency in outward ones, and the firm will have access to data to make decisions that are both economical and beneficial to customers. For instance, providing the experiences that customers want is easily within your grasp if you reliably and consistently know how many units of any particular item you have and where. 9. Smart Inventory Management For Peak Shopping Seasons: Your firm will be far better equipped to handle the additional demand during peak shopping festive season best practices if inventory is carefully planned. There are simple strategies to ensure sure your inventory never drops below that level once you have an idea of what you will need throughout the Christmas festive season best practices. Tracking stock levels and automatically establishing reorder notification points is a useful tool whether you operate with a tech-enabled 3PL or use inventory management software. It is advised that you raise your reorder points and your reorder quantity throughout the holiday festive season best practices to account for an increase in sales. 10. Customer Service For Business Success: Customer service is the backbone of every business, and it is especially important over the holidays.A single dissatisfied client may send a damaging message that has a significant influence on your reputation. You may meet and surpass your customers' expectations by streamlining every step of your order fulfilment process. Conclusion: Businesses must utilise dynamic demand planning formulas in situations like these to precisely forecast inventory requirements and calculate the appropriate quantities of replenishment. Use the data to ascertain your top-selling items, the number of units sold, and the start of the holiday shopping festive season best practices. Excel is frequently used by merchants to forecast demand, which explains why so many of them err. Unfortunately, this manual process is tedious, time-consuming, and prone to human error. When a picker subsequently seeks to fill a client order for three brushes, they will only discover two in the trash since a receiving colleague marked three purple toothbrushes on a spreadsheet when only two were really delivered. Inventory visibility throughout the holiday festive season best practices makes sure that all channels accurately display the goods that are available for purchase.

Season sale: Transition, Pros, and cons

Season sale is essential to understand for transitional times. Between summer and fall, winter and spring, as well as between spring and summer, there are transitional periods. In these times of upheaval, individuals struggle with what to buy and what to dress. However, the majority of stores do not understand the value of transitional attire. Retailers frequently face needless income swings as a result of this error. The right purchase strategies, delivery schedules, and visual marketing provide sales representatives with the resources they need to pitch consumers on appropriate transitional clothing that they can put on right away. As a result, retail income is stable throughout the year. Benefits of Transitional Planning Transitional Sales for Seasonal Income: Sales related to the inventory can increase shop income during the Season sale or transitional months if it is made up of the proper transitional materials and colours.  Seasonal Inventory Strategies: Customers will be able to dress correctly, employees will achieve their season sale objectives, and the store's earnings will rise at a typically quiet time.  Retail Success Essentials:  A successful career in fashion retail requires securing inventory for transitional times while remaining on top of the trends for the future season. Season sales Campaign Marketing initiatives aid companies in expanding their customer base, boosting revenue, and disseminating details about their goods, services, or special season sale offers.  Businesses and websites see increased traffic at specific periods of the year, necessitating the use of fresh marketing strategies to attract customers for season sale.  Seasonal advertising around special occasions or transitional times of year generates interest and FOMO, or the fear of losing out on clients, which can spur action.  This article demonstrates how to develop a seasonal marketing plan and the advantages it may provide for your company. How can Retailers transit between seasons Refreshing Retail Displays Visual merchandisers and merchants need both continually present their stock products in novel ways. Sometimes all apparel plans need is a successful orientation shift.  If sweaters and shirts were originally hung on racks, place them on a table maybe with matching headbands, socks, and shoes.  Use apparel that is appropriate for the season sale, such as scarves or shorts, and highlight them by making them the main attraction of the display.  No matter the season or where you reside in the world, all articles of clothing, including hats, sweaters, and tights, may contribute to your presentation. Tiered Presentation A key aspect of window shopping is tiered displays. Making room for all the products you sell in your store can help customers better understand and appreciate what is in front of them.  For instance, adding step risers to draw attention to popular seasonal accessories like hats, lotions, and nail paints makes it easier for customers to complete an ensemble.  Many shop layouts benefit from the usage of small display items like risers since the merchandise shown there may be changed out every week without the need for significant heavy lifting, which can be expensive and time-consuming for your team. Season sale Clearance When a business begins to seem disorganised due to the lingering effects of the previous season, it is time to perform a thorough cleaning.  Take all the unsold items that are "so last season" and designate a specific area of your store to sell "bargain deals."  Place your clearance inventory in front of these goods on brightly coloured block risers to draw attention to them.  Given that customers frequently make impulse purchases while browsing websites, placing these "last call" products close to a register or other point of checkout is essential for closing down your business. Premium display for Luxury Products  It could be time to move seasonal merchandise to another location if it isn't selling and is starting to gather dust.  High-end products like wallets and handbags are frequently debuted in one season but are easily adaptable to the following.  Nothing exudes luxury like showing it lavishly. A wonderful method to make a product stand out from the competition is to invest in stunning display cases that draw attention to the quality and texture of the item.  This kind of sales style is also a brilliant technique to elevate a product and give the impression that it is worth more than it would if it were folded on top of a shelf or hanging on a rack. Season sale pros and cons Pros Special offers promotion Due to the changing weather, family reunions, and the desire to exchange presents or locate great discounts, holidays and seasonal transitions can excite customers.  A company may capitalise on the enthusiasm by using seasonal marketing to promote special season sale offers that are only available during that particular season sale or holiday.  Given the urgency required to take advantage of this limited-time offer, customers may be more likely to purchase. Promos and customer service The degree to which people are aware of your company's existence and the goods or services it provides is known as brand awareness.  Seasonal advertising aids in promoting the company season sale and might bring in new clients with unique offers.  During the holidays, recommendations and promotions bring in a lot of new customers for many businesses.  By giving fantastic promos and supplying top-notch customer service, new firms may be able to gain a footing in a new sector. Upsell or Cross-sell A season sale is one approach to getting customers into your business, but once they are there, you may upsell or cross-sell other items. They are more inclined to look at other items in the store, even if they are not on sale, once they are in the mood to purchase. Seasonal Business Advantages Selling mostly seasonal goods enables you to take business holidays.  Business owners have more time to prepare for the following season sale because operations are suspended during the off-season.  The quantity of goods you need to order next, your cash flow, and updated operating methods may all be taken into account.  This is the ideal time to research new marketing strategies and reflect on what has and hasn't worked in the past.  Additionally, this is a good opportunity to discuss potential product adjustments with your suppliers. Cons Brand Reputation and Continuous sales Your brand's reputation will decline if you have continuous or routine sales. Particularly if your brand is mid- to high-priced, the product will become less appealing if customers believe it to be more affordable or accessible. Sales Frequency Impact on Expenses Other expenses like more employees, more promotion, and branded materials can cost you money when there are sales. These expenses are controlled when your shop participates in sales just once or twice a year, but when they happen more frequently, they might reduce your earnings.  Seasonal Demand vs. Profit Margins Businesses that sell seasonal goods might legitimately anticipate selling more units during the busy season. Despite the great demand, the supply also tends to grow with time. Due to this, entrepreneurs are compelled to provide cheaper rates, thus reducing their profit margins. Off-Season Payroll Considerations Keeping your staff on the payroll while your firm stops for the off-season is not a sensible financial decision. This frequently entails dealing with a different group of individuals the following time you resume operations, which is not always simple. Conclusion You must be able to swiftly adjust to different personalities and train others effectively if you want them to accomplish their tasks well and represent your business correctly. Finding people who can produce at the level you want requires a lot of trial and error as well as luck.