[2025 Latest Edition] Explaining the key points of apparel inventory purchase! Introducing how to dispose of inventory and turn it into cash!

In the apparel industry, the problem of having large amounts of inventory due to the end of seasons and changing trends is becoming more serious. Many people, especially small and medium-sized apparel companies, are struggling with how to dispose of their inventory, and it is urgent to find an appropriate solution.

This article provides detailed information for those in charge of inventory management and sales management at apparel companies on effective ways to dispose of inventory using inventory buybacks. It provides practical information, from how to turn inventory into cash while protecting brand value to how to choose a reliable buyer.

5 challenges facing apparel inventory

In the apparel industry, inventory issues are unavoidable due to the nature of the products. By properly understanding these challenges, you can take appropriate measures.

The reason behind the large amount of out-of-season and trend-off inventory

Due to the shortening of the fashion cycle, the value of apparel products changes in a shorter period of time than ever before. The main seasons for spring/summer items are from April to August, and for fall/winter items are from September to February of the following year, but sales decline rapidly after these periods.

In recent years, the influence of fast fashion has caused consumer purchasing cycles to become even shorter, making it difficult for companies to predict what will happen. In particular, the spread of social media has accelerated changes in trends, and the gap in lead time from manufacturing to sales has become an issue.

Disposal costs and environmental/CSR issues

Disposal of inventory is not only a cost burden, but also a major environmental issue. Disposal of textile products costs about 200 to 500 yen per kilogram.

Furthermore, from the perspective of ESG management, the environmental burden caused by waste can reduce a company's value, affecting how it is viewed by investors and consumers.

Risk of brand value declining

Improper liquidation of inventory can damage your brand image, especially if the inventory is sold at prices significantly lower than normal retail prices, which can lead to consumers questioning the value of your brand.

Products that are distributed on the market at 30% or less of their original retail price are likely to cause a decline in brand value, which will have a negative impact on future sales of new products. In addition, the distribution of low-quality products also poses the risk of damaging the credibility of the entire brand.

Deteriorating financing and stagnant cash flow

Inventory is recorded as a company's asset, but inventory that cannot be converted into cash essentially means that funds are tied up. In the apparel industry, the ideal inventory turnover rate relative to sales is 4 to 6 times, but many companies are below this standard.

When inventory increases, it becomes difficult to secure the funds necessary for planning and manufacturing new products, which impedes business growth. In particular, for apparel companies that sell a high proportion of seasonal products, proper inventory management is the key to improving cash flow.

The workload placed on inventory management and sales management personnel

Inventory disposal is a task that places a great mental and physical burden on the person in charge. It requires a lot of man-hours, from considering the disposal method to carrying it out.

The main burdens faced by inventory management personnel include organizing data, considering disposal methods, negotiating with vendors, arranging logistics, coordinating within the company, etc. These tasks require a high level of expertise, and can be very stressful for inexperienced personnel.

Comparison of the five main methods of inventory disposal

There are multiple options for inventory disposal, each with its own advantages and disadvantages. It is important to choose the method that best suits your company's situation.

Sale, outlet sales

This is the most common method of liquidating inventory. Brand control is relatively easy since you can utilize existing sales channels.

Sales are often conducted at 50% to 70% of the regular price, ensuring a certain level of profit. However, frequent sales may lead to a decline in brand value. Sales at outlet malls require a dedicated sales space, which incurs operating costs.

Disposal

This is a method that can reliably remove products from the market, but it has drawbacks such as high cost and a large environmental impact.

Disposal is the most reliable method from the viewpoint of protecting brand value, but it is not recommended from the viewpoint of CSR. In addition, management work such as obtaining disposal certificates and selecting appropriate disposal companies becomes complicated.

Donations and novelty items

This can be implemented as a social contribution activity and will lead to improved corporate image.

Donations may be eligible for tax benefits and can be considered part of CSR activities. However, it requires time and effort to select the recipient, manage the condition of the products, and arrange logistics. Using them as novelties can also have a marketing effect, but it is necessary to select the right products.

Online flea market and wholesale platform

This is a method that has gained attention in recent years, and there are platforms for both individuals and corporations.

B2B platforms allow bulk transactions and efficient disposal. However, they require work such as setting prices, creating product descriptions, and dealing with customers. In addition, it can be difficult to manage brand value.

Bulk purchase service

Bulk purchases by specialist companies are an efficient way to get cash while minimizing the hassle.

Bulk purchases have the advantage of being able to convert your inventory into cash quickly, since the time from appraisal to payment is short. In addition, you can dispose of a large amount of inventory at once, which can help reduce warehouse costs.

Why bulk purchasing services are the best

Among the options for liquidating inventory, bulk purchase services offer many benefits, making them an excellent option that meets key factors for apparel companies in particular.

Cash benefits that can be converted into cash immediately

The biggest attraction of bulk purchase is that you can get cash in a short time. Usually, it takes about one to two weeks from appraisal to payment.

This quick cash flow allows companies to fund new product planning and production, or other business investments.

The social value of environmental considerations and waste reduction

Many bulk purchase services contribute to reducing waste by redistributing the purchased products through various routes.

Buyers have various sales channels both domestically and internationally and will select the most suitable buyer based on the condition and brand value of the product. This gives new value to products that would otherwise be discarded, contributing to the realization of a circular economy.

Large quantities and B-grade products are also OK, on-site delivery available

Our bulk purchase service often covers large quantities of inventory and B-grade products with scratches or stains, and can handle even products that are difficult for companies to dispose of.

Many companies offer on-site appraisal services, where an appraiser will visit your company's warehouse. This reduces the cost and time of moving goods. Also, by checking the quantity and condition on-site, an accurate appraisal can be made.

Prevent brand damage with secret sales channels

Professional buyers have their own sales routes to protect brand value.

・Protect your brand image by selling in overseas markets

・Use as a business uniform

・Reuse as recycled material

- Sales in specialized secondary markets

These sales channels will reduce opportunities for exposure to the general public and help maintain brand value.

Options for combining with local government and international cooperation donations

Some buyers offer a combined purchase and donation service.

By donating a portion of the purchase price, you can position it as a CSR activity for your company. In addition, for products that are not eligible for purchase, you may be introduced to a donation destination. This allows you to contribute to society while minimizing waste.

Purchase process & preparation checklist

Advance preparation is important for a successful bulk purchase. By following the steps below, you can ensure a smooth transaction.

Inventory data organization (SKU, quantity, photos)

In order to improve the accuracy of purchase appraisals, detailed inventory data needs to be organized.

First, you need to know the exact quantity for each product SKU (Stock Keeping Unit). It is important to organize basic information such as product category, size, color, material, and list price, and create a database using a spreadsheet program such as Excel.

Product photos have a big impact on the accuracy of the appraisal. Take photos of the entire product, brand tags, material information, and any scratches or stains. We recommend that you prepare 3 to 5 photos for each product.

Sample arrangement and pre-assessment check

Before assessing a large amount of inventory, it is effective to select a representative sample of products and have them pre-appraised.

Based on the results of the sample appraisal, we will estimate the overall appraisal price and use it as a basis for deciding whether or not to proceed with the purchase.

Compare prices by getting quotes from multiple companies

Prices vary widely from dealer to dealer, so it's important to get quotes from multiple dealers.

When requesting a quote, confirm the breakdown by product category, the criteria for products that are not eligible for purchase, the period from appraisal to payment, whether or not there are any fees, etc. Also, ask about past transaction records and areas of expertise to select a company that is suitable for your inventory.

It is important to get quotes from at least three companies and evaluate them comprehensively, not just based on price, but also on the service content and reliability.

On-site appraisal and price negotiation

For a formal appraisal, an appraiser from the purchasing company will visit the site and check the condition of the item in detail.

On the day of the appraisal, we will check that the inventory data matches the actual product and check that there are no discrepancies in the quantity. We will answer the appraiser's questions accurately and explain the background information of the product (manufacturing date, sales history, reason for being a B-grade product, etc.).

In price negotiations, we will search for a fair price while referring to the results of quotes from other companies. In bulk purchases, the advantage is the large quantity, so price negotiations will be conducted on the premise of a bulk transaction.

The fastest possible design for logistics, contracts, and payments

Once the purchase is decided, we proceed with efficient logistics and contract procedures.

Regarding logistics, we confirm in advance the number of trucks, manpower, and work time that the buyer will arrange. In order to efficiently remove large amounts of inventory, we organize the traffic flow within the warehouse and complete the sorting of products.

The contract will clearly state the purchase price, payment terms, delivery time, scope of responsibility, etc. It is especially important to check in detail who is responsible after the product is delivered.

Regarding payment, bank transfer is the norm, but the timing of payment (such as within how many days after delivery of the goods) should be confirmed in advance and incorporated into cash flow planning.

We provide a wide range of services, from collecting and purchasing used clothing to recycling.

We offer flexible services to handle the backlog and remaining inventory of apparel manufacturers. We provide optimal services based on the know-how we have cultivated in the used clothing industry.

Introducing our corporate services

OLD FLIP promotes the effective use of used clothing and sustainable initiatives through partnerships with companies. We provide a service for corporations that purchases the remaining stock of apparel manufacturers and second-hand clothing stores in bulk and redistributes the items in a valuable form.

Our strength is not just to dispose of inventory, but to contribute to society as part of our SDGs activities. Through the reuse of old clothes, we aim to build a partnership that contributes to environmental friendliness and the creation of a sustainable fashion culture.

We also actively undertake joint projects and launch new businesses with partner companies, seeking to create new value by leveraging each other's technologies and know-how.

We are always looking forward to hearing from companies that support this initiative to breathe new life into old clothes. Please feel free to contact us using the email form here for business partnerships or consultations.

A remake service that breathes new life into old clothes by dyeing them black

The fabric is still strong, but the color is fading. Your favorite clothes have changed color. Do you have old clothes like that?

Even for items that are difficult to purchase, we offer a service that transforms them into valuable items through "black dye remake."

In collaboration with Kyoto Montsuki Co., Ltd., a long-established company in Kyoto, these items are dyed a deep black to create attractive, one-of-a-kind items. For a more sustainable society, we offer the option of re-dyeing your favorite clothes through black dyeing so that you can treasure them forever.

Dirty old clothes can be reused with cleaning services

Even if your clothes are in poor condition and difficult to use, we can restore them to a reusable state through our unique cleaning service.

Even clothing with strong stains, odors, or mold can be restored to a usable condition through specialized processing using highly skilled techniques.

We can also wash stuffed toys, kimonos, and dresses. You can also leave high-end clothing and leather items such as fur, which are said to be difficult to clean, to us. We will not waste your precious clothing, but will pass it on to the next stage in a sustainable way.

Proposal for setting up used clothing collection boxes for items that are difficult to purchase

Even if the items are difficult to collect, they can be collected in used clothing collection boxes that have been set up as a way to contribute to the local community. Even damaged or heavily soiled clothing can be reused as a resource, so this is gaining attention as an option to avoid throwing away clothing.

We can also set up the machines in homes, facilities, and stores, and can also be used for local collection activities. We are also receiving more inquiries from organizations that wish to participate in SDGs and eco-activities, which will also contribute to society through collection.

We are particularly focusing on collecting used clothing from Uniqlo and GU, which are difficult to put a price on.

summary

Inventory problems faced by apparel companies are solvable with the right measures. By utilizing inventory buyback services, you can improve your cash flow, reduce your environmental impact, and protect your brand value all at the same time.

Advance preparation is essential for successful inventory disposal. By organizing accurate inventory data, obtaining comparative bids from multiple companies, and selecting the right company, you can achieve optimal purchase conditions. The inventory problem in the apparel industry is expected to continue even after 2025. By establishing an appropriate inventory management system early and utilizing purchase services, you can achieve sustainable business operations.

If you are a company that is having trouble with inventory disposal, please consider consulting a professional. By working with the right partner, you can solve your inventory problems and help your business grow.