11 Questions to Help Clothing Boutiques Track and Manage Inventory

Creating a system for how to track clothing inventory is important for clothing boutiques of every size. The ability to accurately track your stock and size inventory increases customer satisfaction because you have the items they want when they walk in the store or shop online. It can also contribute to the overall financial health of your business because you aren’t carrying overstock or mismanaging your returns. 

No matter the size of your business — from a small, single location to a multi-channel enterprise — it is important for shop owners to keep track of clothing inventory. 

How to Track Clothing Inventory

There are a lot of different ways to track inventory, from using pen and paper to spreadsheets to inventory management tools

While the first two can get the job done, the latter can help make your life a lot easier — especially if you can manage it on the go. 

An inventory app combines the convenience of a handheld or countertop checkout with inventory management that can sync items, inventory, and prices across devices. You can also manage inventory straight from the app and take various actions on received stock and purchase orders.

Inventory management software, with warehouse management system (WMS) and enterprise resource planning (ERP) integrations, can help you keep on top of inventory and scale as your business grows. Square also has open APIs to integrate with WMS and ERP, courtesy of connected tools for large businesses.

Why Clothing Boutiques Need to Track Inventory in the First Place

Tracking inventory is good for your business and customers. Not only does inventory management help you understand what items and sizes are popular, it can also help ensure that you have things that customers want to buy. 

Inventory management will help you avoid two common problems with items: overstocks and stockouts. Both can be problematic. Overstocks result in unwanted items that you can’t sell or have to discount deeply; stockouts result in missed sales opportunities because a shopper can’t get the item they want. Good inventory management can solve both of these problems. 

Additionally, a strong inventory system connected to your point of sale can help keep transactions safe and secure so customers feel good about their purchases. 

Tracking inventory can help your bottom line as well. By making sense of inventory data and understanding the flow of sales and customer demand, you can spend less on inventory by purchasing only items that will move quickly. 

When you are placing orders with vendors and suppliers, tracking the entire process from the order to receiving in one centralized place can help you stay on top of when merchandise will come in. This can help you know how to staff for unpacking and pricing each item, as well as how to merchandise and place inventory on the sales floor. Using software to create purchase orders and reconcile delivery against the original PO will help with retail planning and forecasting. This is a critical component to optimize cash flow and inventory levels, to ensure you have the right items at the right times. 

Inventory tracking has other business benefits as well. By tracking the sales process, you can decrease inventory errors, carrying costs, and issues with out-of-stock inventory.

The result is improved production from order to sale for your clothing boutique and optimized fulfillment for happier customers. 

What to Keep in Mind When Tracking Clothing Boutique Inventory

When you are ready to start tracking inventory, there are a few considerations to keep in mind. You may already have some of these elements implemented into your business model, which will make the process that much easier. 

You’ll need some tools to help manage inventory most effectively, including a barcode printer and scanner. A barcode printer will allow you to print item tags, that include details such as item SKU (stock keeping unit) or GTIN (Global Trade Item Number), item name, price, and size. This can help you track quantities, conduct cycle counts, and provide valuable information for customers. 

A barcode scanner ensures that staff members can provide a quick checkout experience without looking up items manually, reducing checkout errors. You can also use a barcode scanner to read tags and barcodes that come with items from the manufacturer, such as UPC (universal product code), GTIN, or SKU numbers. If showcasing the vendor’s brand is not important to you, you may want to remove the hangtags and use your own labels with your barcode printer. You can create a unique SKU and print a barcode and price label if you don’t want customers to search out the item’s GTIN on their own.  

Additionally, suppliers may include other numbers or identifiers on items, such as an internal style number or vendor code. You can use these to help track items in inventory management software to make reordering easy. 

As you think about how to keep track of clothing inventory, the receiving process should be part of your plan. Think about how you’ll track and compare inventory received against the original purchase order or how to enter items in bulk into your point-of-sale and inventory systems. 

To calculate profit margins and the accurate value of inventory, it is important to receive a quantity with the cost paid to the vendor. Once an item sells, you can then calculate the cost of goods sold (COGS) and the profit margin (final sale price minus the wholesale cost). You will also know the value of the inventory left in the store. If you don’t track the wholesale price and quantities before you put an item out for sale, you are not able to calculate true profit margins. This is why purchase orders work. By documenting the inventory management processes and creating clear instructions, you can create a guide that all of your staff can follow. 

Once you have inventory in hand and are ready to sell, you’ll want to think about integrating a customizable POS into the mix. A strong point-of-sale system allows you to scan barcodes, search for items, or add custom buttons for items that are too small for tags or are sold in bulk. Additionally, the POS should make it easy for staff to access frequently used tools, such as loading gift cards or saving items in a cart, if a customer returns to the sales floor after checkout has started. 

The key benefit of a customizable POS is checkout optimization. Customers will move through the checkout more efficiently and your staff will conduct sales with fewer errors that could throw off inventory. 

If you have any thoughts about selling online, consider a POS that will integrate with eCommerce. An integrated system will manage inventory, so you don’t have to manually adjust between in-person and online sales. It also creates a more seamless experience for customers — wherever they are. 

It’s not the first thing you want to think about, but you need to develop a return or exchange policy.  For instance, you can offer returns within a specific period of time, or only offer exchange or store credit. If you do allow customers to bring items back, you’ll need a method to manage exchanges. How will you enter exchanges back into inventory, or what will that transaction look like? It’s probably part of your inventory management and POS. 

The final consideration for inventory tracking is seasonality. With clothing boutiques in particular, many items are seasonal or fashions will come and fade, meaning many items won’t be ordered repeatedly. 

Seasonality results in special needs for your business, such as tracking categories of items to help you spot trends.  You can create general categories to manage bulk buys that don’t have colors or sizes to manage (such as sunglasses or scarves). Additionally, you may have some items that are only available in-store and not part of the online sales inventory, like merchandise that can’t be reordered.  

The goal is to have a tracking system that meets all of these needs and is adaptable to your business. Tracking tools need to be robust enough to provide all the data and information you need and make it easy for staff to manage day-to-day workflows and sales. 

Important Inventory Management Software Features You Need

Inventory management software is the must-have tool that can streamline processes and help you track inventory more accurately. 

Here’s a checklist of features to look for in inventory management software, all of which are included in your Square for Retail subscription.

How Many Users Have Access?

You want to ensure everyone on your team can access and log in to inventory management and POS tools. Individual logins give you greater tracking capability and can provide different levels of access for different employees, such as making sales versus changing prices. Square for Retail features unlimited staff logins and access.

Is It Scalable?

As your business grows, you should not have to change software or tools. Look for an option that’s scalable by allowing you to add more SKUs, more registers, more staff, and more sales channels.  

Does It Have Offline Access?

What happens if your network goes down? Offline access ensures that you can continue to process orders and take payments. Offline access can also help ensure you can continue to work even if you store inventory in a location that has unreliable Wi-Fi, such as a warehouse or basement.

Is There Cloud Integration? 

Cloud integration is an important element because your data is stored securely, not on-premise, so that you can access it from anywhere. You don’t want to be tied to one computer at the store — run reports from your shop, from home, or on the go using the same mobile platform. 

Does It Have Order Management and Low-Stock Alerts?

Because inventory management is so important, you want a tool that will work for you in real time. Low-stock alerts let you know that an item needs to be reordered soon, and order management provides up-to-date clarity on inventory and orders across all sales channels.

Does It Have Sales Processing?

Streamline business tools with inventory management and a POS in a single tool. Why use two tools when you can do it all with one?

Is There Forecasting and Supplier Data? 

One of the most important features of an inventory management tool is the ability to track information throughout the sales process, from supplier to purchase. Your system needs to include that data, plus forecasting tools to help you make better business decisions moving forward. 

Is There Product Code/Style Code Tracking? 

It’s a no-brainer, but an inventory management system should track all product codes, styles, or other information that identifies items consistently, with reports that you can understand. You can also allow each item to have multiple fields for numeric identification. 

Is There Barcoding/Scanning? 

Part of an integrated POS is barcode printing and scanning to ensure efficient checkout flows.

Is the Tool Configurable? 

Almost every business has configurations or customizations that are unique. While out-of-the-box solutions are great, ideally, inventory management software will allow custom configurations that fit your business.

Does It Have Real-Time Metrics/Reporting? 

Business at a clothing boutique can move fast, especially if an item becomes a hot trend. Real-time metrics and reporting can ensure that you are on top of trends and sales so you have the right items in stock at all times. Real-time reporting can help you manage inventory with agility and provide accurate information to meet customer needs. 

Square for Retail has all of the features you need in an inventory tracking and management tool that connects with your point of sale system. It’s flexible, customizable, and can scale as your business grows. This ultimately makes it easy to do what you love any way — and anywhere.

Carrie Cousins
Carrie Cousins is a digital marketer and freelance writer/designer with 15+ years experience in media, design, and marketing. She's featured in Design Shack, Webdesigner Depot, The Next Web, and Fast Company. She works with The Glorious Company, a content marketing agency.


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