The problem of stockouts can affect companies in any industry, but undoubtedly one of those that most often has to deal with it is the apparel industry. This is due in part to how this sector of the economy works. Learn why apparel companies often face excess inventory and possible solutions to this problem.
Where do surplus clothes in warehouses come from?
The production of everyday clothes is governed by quite specific rules. Each season, fashion companies put out collections that must sell out within the next few months – after that, they simply become unfashionable and lose interest from potential customers. At the same time, the production of clothes is very intensive and even excessive – manufacturers are thus making sure that they will be able to meet demand and maximize their profit.
A side effect of such action is the formation of large surpluses of clothes from past collections that have not found an audience and are beginning to linger in warehouses. Although clothes don’t spoil like groceries or age in the same way as technology, storing them with the hope of selling them the next season is not a good idea from a financial point of view – the chances of selling an unfashionable one merchandise at a good price are low, while the cost of storing it for the next few months outweighs the possible profit.
Precisely for this reason, a good solution to the problem of a pile of clothes from an out-of-date collection is to sell them to a collection.
How does slope buying work?
The principle of stockpile purchase is very simple – our company offers such a service. When a company with surplus goods in stock that it wants to get rid of quickly contacts us, we evaluate the products and make a trade offer. After accepting it after the customer, we transfer the purchased goods to our own warehouses, from where we then sell them at a low price to individual customers or interested companies. At the same time, we make sure that the goods from the slope do not compete with other items from the manufacturer.
Why take advantage of this opportunity?
Selling the slope to a buyback is a very popular solution for garment manufacturers today. This is due to its numerous advantages. Admittedly, the goods are bought at quite low prices, which are often barely equivalent to the cost of production of the item nevertheless there are other benefits worth knowing about. It is about:
- recovery of funds frozen in the products – goods unsold but lying in the warehouse do not bring any financial benefit. By selling it even at production costs, the manufacturer can obtain at least some of the funds needed to resume production or expand the company;
- minimize storage costs – whether a manufacturer has its own warehouses or rents warehouse space, backlogged goods generate costs that over time can outweigh the value of the products. To sell the goods is to get rid of unnecessary expenses;
- Recovering from distribution fluidity – the warehouse is essential for keeping supplies flowing. If warehouses are full of backlogged goods, this liquidity is disrupted, and in extreme cases can lead to a halt in production. Selling the slope allows the company to restore normal operations.
With all this said, selling a stockyard does not generate additional costs in the form of self-organized sales of goods by the outlet department or promotional campaigns – as in both cases it is necessary to delegate people to handle sales.
Your company has a backlog of old clothing collections. We are happy to take care of them! Contact us and together we will find the right solution.
