Shein is renowned for its superb inventory management capabilities. Their well-designed system enables precise control of inventory, ensuring that products are always in the best condition. Shein has unique skills in controlling the industrial chain, and its regulatory secrets are worth learning from. Let’s take a look at how Shein controls inventory management?
? Style classification
According to statistics, Shein releases about 5,000 to 8,000 inventory units and about 200 new styles every day. This is completely different from the methods adopted by excellent fashion brands such as Zara in the early days – mainly how Shein does it.
First, Shein does not rely on its own designers. Instead, the company seems to be providing data on best-selling products to supplier groups, including:
-FOB suppliers. The FOB model means that the Shein platform designs and makes the first sample garment, and then the supplier layer bakes and packages the materials to complete the production. Shein cooperates with about 500 such suppliers.
-Original brand suppliers. Shein cooperates with about 20,000 to 30,000 suppliers. Suppliers can send design pictures to Shein’s internal buyers for inspection. If approved, the supplier can send samples for further confirmation. If there is no objection, they can receive mass production orders, but the quantity is relatively small, usually only fifty to one hundred pieces.
?Production speed
It takes 10 days for one SKU of shein to go from drawing design to shipping container. Compared with Zara, it takes more than 3 weeks for Zara, but Zara’s time cycle was previously known as the gold standard of supply chain response time.
When it only takes ten days to produce a new style, sellers can respond to the market very quickly. If sellers find that the competitor’s goods are popular through interpreted data, they can complete the copy within two weeks. Success no longer depends on innovation, but on whether sellers can copy competitive goods quickly enough.
To a certain extent, the design link is weakened from the supply chain, thereby optimizing the entire production process.
?Stocking rate
Shein applies 15 to 20 days of safety stock, while most fashion practitioners reach more than ninety days.
Shein tests goods at low production, so the corresponding goods may be sold out in one day. When sellers can ship large quantities of goods within 5 days, inventory shortages will not be a worrying problem. Then, in the next production run, suppliers can get data support, so they can produce enough products to ensure supply.
Shein has unique skills in style classification, production speed and replenishment speed by manipulating the industrial chain. The company does not rely on its own designers, but quickly releases new styles by cooperating with suppliers. It only takes 10 days to produce new styles, responding quickly to market demand. At the same time, Shein uses a shorter inventory cycle and a fast replenishment strategy to keep the market supplied. These secret skills make Shein a disruptor and leader in the fashion industry.