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  • Danielle Resende

Strategies to avoid overstock


Every crisis brings an opportunity, and lockdown has shown how businesses, especially from the fashion industry, need to rethink their stock and the supply chain. Reducing the amount of stock is extremely important to improve cash flow and reduce the risk of holding large quantities of product.


For smaller brands, having the right strategies to avoid overstock is undoubtedly an ace up one's sleeve to grow and thrive in the long run. Start by WGSN is here to help independent businesses thrive, and that is why we have produced three approaches that will help reduce overstock.


Reduce numbers of SKUs

Reducing the numbers of SKUs (stock-keeping units) will undoubtedly reduce a business's complexity – and, as we know, complexity costs money. Especially for smaller and independent fashion brands, SKU rationalization will provide more availability to invest in product innovation. With less money spent on item variation, there is more money and time to offer products that will sell!


Implement a more agile supply chain

Building an agile supply chain may sound more difficult for smaller brands that don't have the budget or even the time to hire outsourced companies to achieve this. But there are a few tricks to make your supply chain more agile:

  1. Improving relationships with suppliers;

  2. Creating buy-back contracts;

  3. Getting a more accurate sight of actual demand.


Uphold accurate stock levels

Upholding the right amount of inventory for your product is one of the most crucial strategies to avoid overstock. Although it might seem very obvious, it is no easy task to find the perfect stock level. Data is vital in this path, as it will allow your company to find the ideal balance.