Inventory Management with a Direct To Garment Printer

Inventory stinks.

The nature of a retail startup involves “guessing” at what inventory to carry. And as our friends at Dell said many years ago, the result is “you end up with inventory, which is the physical embodiment of bad information”.

I started an online apparel company a few years ago. Mad Gringo. One of the products we carried was Tshirts.

In the mens line, we’d carry 12 “styles” each season. Each style was printed on 3 colors and we carried 8 colors each season. There were 5 regular sizes and 5 big and tall sizes.

Yep. For those of you doing the math at home, that equates to 360 SKUs across 8 colors of tees. As a startup, the guessing effort was make or break. What styles will sell? What sizes? What colors?

Add in the economics of sourcing the garments (do you decorate someone else’s blank tee? do you find a source on your own?) and the economics of tshirt printing (minimums, #s of colors, screen sizes for different sized tees, front/back prints) and it’s enough to drive you mad. Gringo.

As the season moves along, you chase some winners, try to get rid of some losers and drive top line sales. At the end of the season, what did you end up with? Inventory. A few pieces per style, per color and per size. Per style it doesn’t look like much, but across the warehouse it adds up. Specifically, it adds up at $4 a tshirt and an average of $1.25 a print plus all those other little costs like warehousing, damages, returns and samples.

The apparel industry takes all this into account with margins, right? Start with high markup, discount what you can, then liquidate what’s left at $1 a pop. Net your margins out for the season.

I’m a slow learner, but it didn’t take too many seasons before I started looking for another way. What ended up being the Brother way.

 

I traded a much higher cost of goods for little to no inventory because with my new-used Direct To Garment printer, I kept a few blanks tshirts in stock and only printed what was ordered, when it was ordered.

It required a bit of planning, a lot of damaged goods and a fair amount of Photoshop expertise but it worked. It kept inventory tracking with actual demand and started to eliminate the guessing.

And the excess inventory.

When I get a chance I’ll talk to you about the Long Tail Demand opportunities that opened up too.

Good stuff.