Blog: Buying stock versus indenting?

phoebe_soloIs it better to forward order or go for in season purchasing? Phoebe Garland digs deep…

Phoebe Garland is co-founder & co-owner of Garland & Garland Fashion Pty Ltd, a Sydney based fashion agency which also offers full project management of sales & marketing materials including sourcing, managing and appointing suppliers for digital campaigns and PR services for the fashion industry.

Winter 2010 was a terrible time for retailers, mainly due to the abnormally hot weather. It took so long for the weather to break and it was still hitting high 20s well into May. With many retailers taking early deliveries of knitwear & winter indent, some arriving as early as February, it made for a very difficult winter season. Then the department stores decided to go on sale on current winter stock, which didn’t help the small retailer at all. We found as fashion agents, for the first time, our retailers were trying to figure out which garments were going into stock service. It would appear that global warming was starting to have an affect on the way retailers buy. Climate change is essentially cutting the seasons short, and in combination with the ill effects of the GFC, it’s no wonder retailers are nervous buying indent ranges. Retailing has become more challenging than ever and the question remains, to buy stock or to indent?

Buying stock only may be convenient, perhaps safe and tempting, however you run the risk of losing your big indent labels to competition. Why is indenting still important? Manufactures need the support of indent orders in order to be able to offer stock support ranges in season. With the majority of labels being made overseas, particularly in China, manufacturers need to meet high minimums from the factories, in order to produce the ranges in the first place. Without indent orders, there is no way they can judge which styles will generate sufficient demand to justify the minimum quantities to warrant production.

Garland_pic_2Indenting can be successful, and here are some suggestions as to how to make it work. Buy in depth, but don’t over extend yourself financially or over buy. When you do indent, spread the payments of the indent over multiple months, as it will be gentler on the cash flow. It will allow you to sell through more and get into less debt. A good manufacturer will allow you to stagger deliveries and consequently payments. Another benefit – indenting can guarantee fully co-ordinated stories that can be carried together, unlike stock bought off the floor, which quite often it can be case of you take what you can get, meaning your shop can look very un-co-ordinated and look like you are running a discount outlet, which usually means excess markdowns.

Stock buying can be effective for either special requests from customers of best sellers and also for refilling of basic garments in ranges. Stock buying can be also good to look at layering transitional pieces for between seasons, an area that seems to be growing quite a bit due to our climate in Australia. When buying stock make sure you try to buy as much as you can from your indent manufacturers. It will strengthen your relationship with them, and in the long run will allow them to produce better ranges for you for both stock and indent.

In summary, there’s sound reasoning for both forward ordering and in season purchases. It’s just a matter of striking the right balance.

As always we would love to hear your thoughts contact us info@garlands.com.au or
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