Opinion: The 3 Most Common Mistakes Inventory Managers Make

By Evan Porter, Former Global Inventory Manager, Fashion Retail Industry

After 9 years managing inventory for one of the world’s largest fashion retail chains, I’ve seen it all - glorious wins and epic missteps. If there's one lesson that sticks with me, it’s that small mistakes in inventory management can quickly snowball into multimillion-dollar problems. Here are the three most common inventory management mistakes I’ve seen - and the steep prices paid for them.

1. Overstocking: The Silent Profit Killer

One of the biggest pitfalls for inventory managers is overstocking—ordering too much product based on over-optimistic sales forecasts. I remember a particular season when our team over-ordered a popular line of denim jackets, expecting sales to skyrocket after a major marketing campaign.

What we didn’t anticipate was an unseasonably warm winter. Those jackets sat on shelves, eating up valuable warehouse space and tying up capital. We eventually resorted to massive markdowns, erasing our profit margins. The Cost:

Lost Revenue: Profit margins shrink due to heavy discounting.
Storage Fees: Warehousing overstocked items becomes costly.
Obsolescence: In fast fashion, last season’s overstock often becomes unsellable.

2. Underestimating Lead Times: The Missed Opportunity Trap

Another recurring mistake I’ve witnessed is underestimating supplier lead times. One holiday season, we bet on a new shoe line becoming a hit. We ordered late, assuming our supplier could ramp up production quickly. They couldn’t. By the time the shipment arrived, the holiday rush was over, and demand had evaporated. Not only did we lose critical sales, but we also damaged our reputation for having the latest styles. The Cost:

Lost Sales: Late deliveries mean missed peak demand periods.
Reputation Damage: Customers lose trust when items are perpetually out of stock.
Rush Fees: Expedited shipping charges quickly eat into margins.

3. Ignoring Data-Driven Forecasting: A Costly Blind Spot

Too often, I’ve seen inventory managers rely on gut instinct rather than leveraging real-time sales and inventory data. This old-school approach once cost us dearly when we misread demand for a collection of accessories, assuming past trends would hold steady.

Had we invested in better forecasting tools and trusted the data, we could have adjusted our orders early enough to prevent overproduction. The Cost:

Forecasting Errors: Guesswork leads to chronic under- or over-ordering.
Lost Competitive Edge: Competitors with better analytics react faster.
Waste and Sustainability: Unnecessary production harms both the environment and the bottom line.

The Bottom Line

Inventory management is as much an art as it is a science, but the industry is moving increasingly toward data-driven precision. To stay competitive, supply chain leaders must ditch outdated methods and embrace predictive analytics, supplier partnerships, and real-time monitoring.

The stakes couldn’t be higher: In a fast-paced retail environment, even one wrong call can cost millions—or worse, your career.

Evan Porter is a former global inventory manager in the fashion retail industry and a supply chain consultant specializing in inventory optimization and logistics strategy.