How Much Inventory Should I Order for My New Clothing Store/Boutique?
<p>Launching a new clothing store can be an exhilarating experience. It feels like your childhood dream has finally become a reality.</p><p>Chances are, you have figured out what to sell – and the ideal audience you want to sell to. However, you quickly realise you haven’t really thought about how much stock you should order from a manufacturer.</p><p>One part of you wants to order a million new products because more inventory could mean more sales and potentially higher profits, but it also comes with increased risk and costs. But the other part of you knows ordering that much stock might leave you in a bind, as you might end up tying up cash in inventory that won’t sell, considering it’s a new business.</p><p>Finding the right amount of inventory is a balancing act between maximizing sales opportunities and minimizing the risk of excess stock.</p><p>So how much stock should you order to stay profitable as a new boutique? That’s what this post is about, so stay tuned.</p>
<h2>Factors to Consider When Ordering Stock</h2>
<p>There are key factors to take into consideration before placing a production order. They are as follows: </p>
<h3>Season</h3>
<img width="800" height="534" src="https://images.ctfassets.net/yzyxputw75g5/5fW80LWtfpWbDsGYNpNKmN/2d717f629494de5ed6ee1d199b74fbc4/fashion-season.jpg" alt="how much inventory for clothing store" loading="lazy" srcset="https://images.ctfassets.net/yzyxputw75g5/5fW80LWtfpWbDsGYNpNKmN/2d717f629494de5ed6ee1d199b74fbc4/fashion-season.jpg 1024w, https://images.ctfassets.net/yzyxputw75g5/5fW80LWtfpWbDsGYNpNKmN/2d717f629494de5ed6ee1d199b74fbc4/fashion-season.jpg 300w, https://images.ctfassets.net/yzyxputw75g5/5fW80LWtfpWbDsGYNpNKmN/2d717f629494de5ed6ee1d199b74fbc4/fashion-season.jpg 768w" sizes="auto, (max-width: 800px) 100vw, 800px" />
<p>Imagine ordering 100 pieces of jacket in Summer? One thing is sure: your only hope is to wait till winter to sell them off. By the time winter comes around, people might be looking for a style of jacket, making yours obsolete. That’s lost sales and tied-up cash.</p><p>For this reason, it’s important to take season into consideration when <a href="https://www.uphance.com/blog/the-art-of-assortment-planning/">planning your assortment</a>.</p>
<h3>Fashion Trends</h3>
<p>Fashion is highly dynamic and influenced by evolving trends. What’s popular today might not be tomorrow, making trend forecasting a critical aspect of <a href="https://www.uphance.com/apparel-erp/inventory-management/">inventory management</a>. Staying updated with fashion trends can help you stock items that are likely to sell, enhancing <a href="https://www.uphance.com/blog/what-is-inventory-turnover/" target="_blank">turnover rates</a> and reducing markdowns.</p>
<h3>Local Events and Holidays</h3>
<p>Local events and public holidays can significantly affect your inventory needs. For instance, if your store is in an area that hosts a popular music festival annually, you might want to increase your stock of festival-appropriate attire like bohemian dresses or band t-shirts during that time.</p>
<h3>Customer Demographics and Preferences</h3>
<p>Understanding who your customers are is crucial in deciding what types of clothing to stock. Different demographics have varied tastes, preferences, and spending habits.</p><p>For instance, if your store is located close to a university campus, you will likely enjoy higher sales if you sell casuals and tees than if you sell formal clothes. </p>
<h2>How to Calculate How Much Inventory to Carry for Your New Store</h2>
<p>Unfortunately, there is no clear-cut formula for calculating the right amount of goods to stock the first time you launch your store. </p><p>Nevertheless, there are certain key metrics you need to take into account so as to properly calculate how much inventory you need to order. </p>
<h3>Economic Order Quantity</h3>
<p>This describes the ideal amount of goods you need to order to meet customer demand and minimize inventory handling costs while staying profitable. </p><p>We’d say, don’t worry so much about this now you are just starting. But you can read more about <a href="https://www.uphance.com/blog/what-is-economic-order-quantity/">economic order quantity</a>. </p>
<h3>Safety Stock</h3>
<p>There are times you may experience delays when you place an order for goods. If you are completely out of stock and this happens, you will miss several sales opportunities. </p><p>To avoid this, you need to have what is known as <a href="https://www.uphance.com/blog/what-is-safety-stock/">safety stock</a>, which is just a form of emergency stock you sell during supply chain disruptions. </p>
<h3>Minimum Order Quantity/Factory Minimums</h3>
<p>Many manufacturers have a <a href="https://www.uphance.com/blog/minimum-order-quantity-what-it-is-benefits/">minimum order quantity</a> rule. This is the minimum number of products they can sell to you as a retailer. It’s also important to factor this in too.</p>
<h2>Evaluating Storage Space</h2>
<p data-pm-slice="1 1 ["contentOptimizer",{"suggestionId":"ef72ffe4-d501-4b01-8853-30b0068df4f9-newSection","state":"written"}]">Before deciding how much inventory to order, it’s important to evaluate your available storage space. The amount of inventory you can carry is directly influenced by the size and layout of your store, as well as the type of inventory you plan to stock. </p><p data-pm-slice="1 1 ["contentOptimizer",{"suggestionId":"ef72ffe4-d501-4b01-8853-30b0068df4f9-newSection","state":"written"}]">Efficient use of storage space not only helps you keep your store organized but also plays a key role in your overall inventory management strategy. In this section, we’ll look at how to assess your storage capacity and make the most of the space you have.</p>
<h2>Optimizing Storage for Efficiency</h2>Making the most of your storage space is key to keeping inventory costs down and improving your cash conversion cycle. Using inventory management software can help you track inventory levels in real time and identify slow-moving or excess inventory that’s taking up valuable space.
Implementing a just-in-time inventory system can further reduce carrying costs by ensuring you only order what you need, when you need it. Additionally, using economic order quantity (EOQ) models can help you determine the optimal amount of inventory to order, balancing storage costs with customer demand.
By optimizing your storage and inventory management processes, you’ll free up cash, reduce unnecessary expenses, and set your boutique up for long-term success.
Conclusion
The simplest answer is to start small. Knowing the right amount of stock to order is a skill that takes years to build – even professionals with years of experience still struggle with it.
When starting, it’s best to start small. As a rule of thumb, commit 40% of your initial capital to purchasing inventory. Let’s say you have $1000 in initial capital you intend to commit to procuring inventory. Start with $400.
That way, if you end up purchasing products people won’t buy, your losses will be minimal. Plus, you will have enough cash to try a different assortment strategy.
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Ronnell writes about onboarding, adoption, and operational readiness for apparel brands moving to a connected platform. His articles focus on what it takes to go live with confidence and sustain strong execution across channels, warehouses, and teams.
Ruchit writes about product strategy for apparel operations, covering how mid-market fashion brands use connected workflows to manage product development, inventory, orders, warehouse execution, and reporting.
