Wasteland of material goods
June 4, 2010 10:52 AM   Subscribe


As a person with little experience working in retail, but who has often felt overwhelmed while shopping in malls and huge stores, I have always wondered this. Say you're a high-end clothes store. What you don't sell in your store, you might put on clearance or send to another store in your chain. If it still doesn't sell, it might go to an outlet store. If that doesn't work, maybe it goes to Goodwill, or to some organization that simply gives clothes away. Still, do all these clothes really get worn? All the reams, bales and tons of ugly or strange looking stuff that doesn't fit everybody and quickly goes out of style? Do clothes get recycled much? Does a lot of it wind up in landfills? Do the people whose job it is to fill stores (buyers, I guess) know full well that only a percentage of the items will be sold, but since they don't know for sure what will sell, they overstock on purpose so that their customers have a variety of products to choose from? How much do they overstock? How much of it do they expect will sell? Are they doing OK if they only sell, say, 75% or less? What percentage of inventory does an average store sell at full price or discount and still make a profit?

I know the answers to these questions probably vary greatly from industry to industry, and even from store to store. But it would be interesting to get an idea.
posted by serena15221 to Shopping (10 answers total) 19 users marked this as a favorite
It's never going to be as bad as you might think, simply because there's a financial interest in not carrying too much inventory. Inventory is both an asset and a cost center.

"Whoo-hoo, we have a big warehouse full of stuff!"
"That's not a good thing."
"Because we're paying rent on the warehouse and the IRS is taxing us for owning the assets in the warehouse."
"Oh. Whadda we do now?"
"Sell this shit as fast as we can by pricing it correctly. And stop piling shit up in the warehouse."
posted by Cool Papa Bell at 10:58 AM on June 4, 2010 [5 favorites]

The only thing I could add to Cool Papa Bell's answer is that some portion of that inventory (probably varying by product or industry) simply 'disappears' due to shrinkage. I know of one large retail operation that rolls a truck to each retail location about every 48 hours. The stock turns over about that fast and it's managed (as best as it can be managed) up the entire supply chain.
posted by jquinby at 11:03 AM on June 4, 2010

I don't have clothing retail experience, but from my time at Big Box Bookstore, I can tell you that whatever doesn't get sold, or whatever has been determined to not be worth shelf spaces, gets sent back to the vendor for credit. At Big Box Bookstore, the only items that get marked down are "remainders" that the publishers have sent in with the express purpose of them being clearance priced, or house-published titles.
posted by litnerd at 11:20 AM on June 4, 2010

Ah, litnerd makes a good point - some large retailers (and one in particular) basically stock their shelves with goods on consignment, if it doesn't sell it goes back.
posted by jquinby at 11:31 AM on June 4, 2010

I was an Accounts Receivable clerk for a small, high end dress manufacturer and part of my job was managing credits for merchandise returns against debits for new stuff. The small boutiques were easy to deal with since I was usually interacting with an owner or key employee.

The bigger clients (Bergdorf, Saks, Kleinfeld's, Neiman's, Henri Bendel, Lord and Taylor) were another story. I put together some epic faxes; copies of PO's, invoices, RMAs, and so on attached to a letter and a spreadsheet with each garment's order/delivery/payment history. It was a thrill to pin the other clerk down and get the check. Bergdorf's was always a real mess and I finally threatened to withhold several upcoming special orders until they sorted it out and sent a check.

Anyhow. We moved some returns out to other boutiques. We moved some to local (Los Angeles) boutiques on consignment and/or as stock for "Meet the Designer" events. We occasionally sent a few as stock with the salesman on "Trunk Shows" (Trunk Shows were mostly about special, custom fit orders, however). Finally, we held "Sample Sales" every six months or so to clear out the returned goods we couldn't otherwise move along.
posted by notyou at 12:24 PM on June 4, 2010 [1 favorite]

Chanel, ever since being bought by the Wertheimers, will hold a sale or two or sell internally to staff, but shreds everything else. To maintain mystique.

So Marge Simpson never bought that outfit.
posted by IndigoJones at 3:18 PM on June 4, 2010

I've often wondered the same thing. Granted, people do buy a lot of clothes. I read a statistic somewhere that the average American family buys five new items of clothing a week. A week!

I do know there is a fairly brisk business in baling up clothing, shredding it, and using the fibers elsewhere. Stuffing, insulation, carpet pads, that kind of thing. Apparently a lot of clothing gets sold by the ton to the overseas market for this purpose.

I don't think any clothing ends up in the landfill. At worst, it can be donated to a charity for a tax deduction, correct?
posted by ErikaB at 3:22 PM on June 4, 2010

Sorry for the multiple posts...I keep thinking of things. The city of NY shreds seized counterfeit goods. Here's a Google Answers question from a high-end business seeking a clothing shredder in NY. And here's a pretty good, succinct overview of where unsold clothes go. That writer does say clothes end up in the landfill but provides no details about that.
posted by jocelmeow at 4:09 PM on June 4, 2010

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