Shein The Skills and Importance of Inventory Management
Merchants on the Shein platform understand the importance of inventory management. Good inventory management can not only ensure the timely supply of goods, but also avoid the adverse effects caused by inventory backlogs or out-of-stocks, thus improving operational efficiency. Here are specific steps on how Shein achieves efficient inventory management.
Style Classification: Market-Oriented Design Decisions
In order to better meet market demand, Shein does not rely on its own designers, but relies on cooperation with suppliers. Under this model, Shein can use data analysis to identify currently popular styles and invite suppliers to participate in design based on this information. In this way, Shein is able to launch about 5,000 to 8,000 SKUs and about 200 new styles every day.
Specifically, Shein mainly works with two types of suppliers: FOB suppliers and original brand suppliers. The former means that after Shein designs and produces the first sample, the supplier will be responsible for subsequent production and material procurement; the latter means that the supplier can submit the design drawings to Shein’s internal procurement team for review. Once approved, the supplier will Ability to obtain small batch production orders.
Production Quantity: Data-Driven Forecasting Model
Shein looks to historical sales data and market trend analysis when deciding production quantities. The advantage of this is that merchants can adjust the production scale according to actual demand and avoid inventory backlog due to overproduction or missed sales opportunities due to insufficient production. In addition, Shein works closely with factories to ensure timely procurement of raw materials.
Production speed: quickly respond to market demand
Shein also excels in production speed, with a SKU taking only about 10 days from design to shipping. Such efficiency allows Shein to react quickly to market changes. If an item is found to be popular with consumers, Shein can replicate the style and put it on the market in a short period of time.
Replenishment speed: Flexible response to sales fluctuations
Shein’s replenishment strategy is equally efficient. Typically, Shein will start with a lower minimum order quantity to test the performance of new products. If a certain product sells well, additional orders will be placed within a short period of time to ensure continuous supply in the market. This approach not only reduces inventory pressure, but also improves capital utilization.
Shein stands out in the fierce market competition through precise style classification, efficient production processes and flexible replenishment mechanisms. For merchants looking to succeed in e-commerce, learning from Shein’s experience in inventory management is undoubtedly very valuable.