Most apparel and merch brands assume that design or marketing is their biggest hurdle. But there’s an unseen pitfall that can sink your profits even faster: inventory management.
If you ignore it, it doesn’t matter how gorgeous your designs are or how massive your audience is. You will lose sales, customers, and money.
I recently sat down with Brian, Threadbird’s Director of Operations and a 20-year veteran of warehousing and inventory management, to discuss the biggest mistakes brands make and how to fix them. Here’s what we covered.
Why Inventory Management is Critical
Inventory management is the key to success for any e-commerce brand. It ensures you have good profits, good variety, and most importantly, reliable stock.
Maintaining customer satisfaction relies entirely on managing your inventory. If you build a reputation for not having products in stock, customers will eventually move away from your brand.
I’ve experienced this frustration myself as a shopper. Finally deciding to pull the trigger on a pair of joggers only to find them out of stock is a huge buzzkill.
Unless your specific strategy is limited-edition drops, you need to maintain stock on your core items to keep your customers happy.
The “Killer” Mistake: No Exit Strategy
When I asked Brian about the biggest mistake he sees brands make, his answer was immediate: not having a plan or an exit strategy.
Before you even launch a product, you should know:
- What the product life cycle looks like
- What your profit margins are
- How quickly you can get more stock
- How quickly you can get out of it if it fails
You need to know your “trigger points.” If a product is underperforming or sales are diminishing, you can’t let it sit on your shelf indefinitely.
Stop “Bleeding Cash” on Dead Stock
A common issue is that brands get stubborn. You might have old merchandise that isn’t selling, but you don’t want to discount it because you fear devaluing your brand. Brian points out that this mindset is often more costly than the discount itself.
Here’s the reality: you’re paying more for storage than the unit is worth.
Brian noted that brands often pay exponentially more to store an item over a year than the item’s original cost. When you look at comprehensive reporting, holding onto non-producing items for 9-12 months costs more in the long run than simply liquidating them.
The Solution:
Monitor the Life Cycle – Look for declining sales over 30, 60, or 90 days. If margins shrink or costs rise, it’s time to exit.
Free Up Capital – Even if you sell old stock at a break-even price or a loss, you get cash back to invest in new products. New products are your best marketing tool. Don’t let old inventory tie up the capital you need to innovate.
Create Scarcity – Bundle old items to increase cart value or market them as “limited edition” because stock is low.
Invest in Technology
Brian’s biggest piece of advice for startups and entrepreneurs is to invest in technology.
I’ll be honest, in the early days before we had robust systems in place, we faced constant errors. Orders shipping wrong or taking too long. Implementing the right technology transformed our fulfillment operation into a legitimate, efficient 3PL.
Good technology allows you to:
- Streamline operations
- Avoid costly manual errors
- Scale without growing pains
- Integrate seamlessly with sales platforms like Shopify
Lean on Experts
At the end of the day, you don’t have to do it all alone. A fulfillment partner isn’t just a service provider, they’re a partner in your growth.
Working with a team like Threadbird gives you access to decades of experience and data analysis that can help you spot profit leaks you might have missed.
Allowing a partner to handle the warehousing and logistics frees you up to focus on what you do best: marketing and creating amazing products.
