What Is An Inventory Tracking System? A Guide for Apparel Brands

An efficient, reliable inventory tracking system is a must-have for every apparel brand, no matter how big or small, looking to get ahead in business. As the name suggests, an inventory tracking system – otherwise known as inventory management software – is a cloud-based or on-premise solution that enables you to track your raw materials and finished goods (collectively called inventory) as they move along your supply chain.

To put it in another perspective, inventory tracking is the practice of monitoring products – either in finished or raw form – right from when you receive them from your supplier to when they are moved into your warehouse to when they are shipped to a customer. Any software that enables you to track your inventory across multiple locations is known as an inventory tracking system.

Tracking your inventory has many benefits. If nothing else, it minimizes the chances of stocking excess inventory, which ties down your capital. Additionally, it fosters accurate inventory forecasting and improves inventory accuracy.

In this post, we will dive deep into what inventory tracking systems are about, why they are beneficial, and how to implement them properly.

What Is an Inventory Tracking System?

Inventory tracking system

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An inventory tracking system, or inventory control system, is a technological solution designed to help businesses manage and monitor their inventory levels, movements, and related data.

It provides real-time insights into the quantity, location, status, and history of every item in your inventory, enabling you to make informed decisions about purchasing, stocking, and selling products.

An inventory tracking system eliminates the need for manual inventory tracking by leveraging automation and machine learning.

What Variables Does an Inventory Management Software Track?

An inventory tracking system does more than monitor inventory levels and quantity – it also tracks the following variables:


Inventory tracking software

It’s almost impossible for the stock you have on hand to remain at one spot – not unless it’s a dead stock. More often than not, they move across different zones in your warehouse and sales channels before they eventually get shipped out to customers. This is where an inventory management system comes in handy.

These systems give you clear visibility into your inventory trajectory and transit path. That way, you can always tell where an item is. The instant benefit of this is better customer satisfaction. When you know exactly where an item is, you will find it easier to instantly locate and ship it once an order comes in.


Imagine this scenario: A customer orders, say, a print shirt on your website after seeing it’s in stock. Then when you attempt to fulfill the order, you realize another customer had previously ordered it and now it’s out of stock, leaving you with no choice but to cancel the order.

That is going to be a distasteful experience for that customer, and there’s a good chance you will lose them for good.

Utilizing an apparel inventory management system can greatly reduce the chances of this happening by updating the status of a product in real-time: available, sold out, or still a purchase order.

Storage Costs

An effective inventory management system can give you insights into how much it costs to store inventory. This includes rent, labor, and logistics costs. Calculating your retail prices for optimal profits will become easier when you know the storage and carrying costs for your inventory.

Inventory Turnover

It’s important to know how fast – albeit slow – your products are selling. The common way to know this is by calculating your inventory turnover rate.

If the inventory turnover rate is high, it indicates that your products are selling pretty fast – and the opposite, the other way around. Calculating your inventory turnover rate manually would be a cumbersome process, which can yield inaccurate results. However, using a clothing inventory system can make the work easier and the results more accurate.

Key Components of an Inventory Tracking System

While it’s true that not all inventory tracking software are the same, certain key components are often built into them. Below are a few of them:


A database is the heart of an inventory system. It is where key inventory information related to your inventory is stored. This includes product details, quantities, suppliers, and transaction histories.

Barcode/RFID Scanners

These tools allow for quick and accurate data entry by scanning product barcodes or RFID tags. This reduces human error and speeds up the process of adding or removing items from your inventory.

Inventory Management Software

This software acts as the control center, facilitating data input, analysis, and reporting. It often includes features like order management, demand forecasting, and reporting capabilities.

Integration Capabilities

Many inventory tracking systems can integrate with other software, such as accounting systems or e-commerce platforms, to ensure seamless data sharing and process automation.

Inventory Tracking Methods

There are a couple of methods you can try to track your inventory. The method you try will largely depend on your budget and the size of your business. That being said, here are some of the popular methods for tracking inventory, particularly for apparel businesses.

Manual Tracking

Manually tracking involves physically inspecting your inventory for quantity, quality, and status at regular intervals, often biweekly or monthly. Essentially, this is known as periodic inventory counting. While it’s simple and low-cost, it can be time-consuming and prone to errors due to human oversight.

Often, spreadsheets are used for this method of tracking. Unfortunately, this method is susceptible to data entry errors and lacks real-time visibility.

Barcode-Based Tracking

Barcode systems use unique barcodes on each item, and employees use handheld scanners to read these barcodes during various inventory transactions. It significantly reduces errors and speeds up data entry.

QR codes are also used for this process. Similar to barcodes, QR codes can store more information and are increasingly used for inventory tracking, especially in retail and e-commerce.

RFID (Radio-Frequency Identification)

RFID technology uses radio waves to track and manage inventory items. Each item is equipped with an RFID tag, and RFID readers automatically capture data without the need for line-of-sight scanning. This method offers real-time, highly accurate tracking but can be more expensive to implement.

Inventory/Supply Chain Management System

This is by far the most reliable method for tracking your inventory. Often, inventory management systems utilize automation and machine learning to monitor your inventory, updating your records in real-time each time you make a sale or receive products from your supplier. It integrates your barcode system and RFID.

Benefits of Utilizing Inventory Tracking Systems

Procuring an inventory tracking software for your business costs money. This can make you wonder if it is worth it in the first place. The truth is that these systems can benefit your business in several ways. Here are a few of them:

Real-Time Visibility

Inventory tracking systems provide real-time insights into your inventory levels, allowing you to see exactly what you have on hand, where it’s located, and how quickly it’s moving. This visibility enables you to make informed decisions, respond to changes in demand, and avoid overstocking or understocking situations.

Accuracy and Reduced Errors

Human error is an inherent risk in manual inventory management. Inventory tracking systems, particularly those using barcode or RFID technology, drastically reduce errors in data entry, ensuring that your inventory data is accurate and up-to-date. This accuracy leads to better decision-making.

Cost Savings

Accurate inventory data helps you optimize your stock levels. You can reduce carrying costs associated with excess inventory and avoid lost sales due to stockouts. Additionally, improved efficiency in managing your stock can lead to reduced labor costs.

Enhanced Efficiency

Inventory tracking systems automate many tasks that were once time-consuming and manual. These systems streamline processes such as order management, stock replenishment, and cycle counting, freeing up your staff to focus on more strategic and value-added activities.

Improved Customer Service

When you know exactly what’s in stock and where it’s located, you can fulfill customer orders more quickly and accurately. This leads to higher customer satisfaction and loyalty, as well as potential referrals.

Data-Driven Decision-Making

Inventory tracking systems provide valuable data and reporting capabilities. You can analyze historical sales data, monitor trends, and forecast demand more accurately, enabling you to make informed decisions about purchasing, pricing, and stocking strategies.

Tips for Implementing an Inventory Tracking System

Here are steps to take to ensure that implementing an inventory tracking system for your business yields the highest return for your business.

Set Clear Objectives

Before you begin, define your goals and objectives for implementing the inventory tracking system. Whether it’s reducing stockouts, improving accuracy, or cutting costs, having a clear purpose will guide your implementation strategy.

Select the Right System

Choose an inventory tracking system that aligns with your business needs and budget. Consider factors like scalability, ease of use, integration capabilities, and support from the vendor.

Plan Thoroughly

Develop a comprehensive implementation plan that outlines tasks, timelines, and responsibilities. Make sure all team members involved understand their roles and the project’s objectives.

Invest in Training

Properly train your staff on how to use the inventory tracking system. Provide hands-on training, documentation, and access to support resources. Well-trained employees are more likely to embrace the new system.

Move Your Business Forward with Uphance

Ready to move your business forward with a reliable inventory management system uniquely designed for apparel businesses? It’s about time you tried your hands on Uphance. 

Uphance enables you to effortlessly track and manage your inventory across all touchpoints. This, in turn, leads to better efficiency and more time to focus on core aspects of your business, such as marketing and product development. 

Sign up for a free trial right away to take Uphance for a spin.

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