What is the zero-inventory model?

The biggest inefficiency in fashion is the cost of inventory which doesn’t sell!

Predicting what will sell and aligning supply and demand in the trend-driven fashion industry is an almost impossible task. So how is it possible to run a zero-inventory model for a fashion brand?

The pandemic has accelerated the pre-existing critique of consumerism in the fashion industry. Even before Covid-19 only 60% of garments were sold at full price showing that brands have hugely excessive inventories which then require collection-wide markdowns.

The solution to overproduction, stock & markdowns? Moving towards an effective, demand-led model or developing made-to-order garments and as close to ‘zero-inventory’ as possible. In the perfect ‘zero-inventory’ model all fashion garments or products will be made on-demand or made-to-order. Without any inventory there is no desperate need to clear old stock which creates more of a responsible consumption relationship for the brand.

How can brands move towards a zero-inventory model?

  1. Look to ‘lean’ or ‘just-in-time’ manufacturing

  2. Implement pre-order or made-to-order methods

  3. Reduce manufacture to single-unit production

  4. Build relationships with manufacturers to work this way

  5. Speak to your customers about these processes

Prior to the fast-fashion era excess product at the end of a season was seen as beneficial as it offered other customers an entry point to the brand through markdown. But now brands have resorted to using sales to drive the sale of products in volume, they make excess inventory to achieve the lowest cost-per-piece on production runs with the aim of selling it ‘at some point’. This approach has meant we now see massively reduced margins, the number of full-price garments sold at a low and a vicious cycle of ridiculous sales.

Alongside creating excessive waste and having millions of pounds tied up in stock these brands are essentially training customers to wait for the sale. This consumer behaviour is then driving this model and approach to continue and speed up.

Technology can support the movement towards a ‘zero-inventory’ model. It will be technology which will allow made-to-order and made-on-demand models to become the norm in fashion. Here are some of our suggestions of companies and tools with this approach in fashion:

  • PlatformE - production software helping made-to-order logistics run smoothly

  • XYZ EXCHANGE - blockchain based software to enable fashion and apparel companies to thrive by adopting circular practices

  • Resonance - management software to allow you to make product on demand in their factories

There are a growing collection of designers and brands who are leading the innovation towards a zero-inventory model. Many of these brands have built their businesses from the ground up with little to know investment. Many of these brands are utilising new technology through collaboration and partnerships allowing them to be at the heart of this fashion innovation. Brands who are implementing a ‘zero-inventory’ model include:

  • Stòffa

  • Karoline Vitto

  • Brass

  • Unspun Jeans

Check out the Rockett Fashion blog posts on methods to avoid overstock and overproduction in your business. Stay in the loop by subscribing to the Rockett Fashion blog here.

Want to write for us? Send an email with your CV and a paragraph about why you want to write for Rockett Fashion to team@rockettfashion.com. We do not endorse unpaid internships of any kind so all of our writers, interns and assistants are paid.

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