It’s now mid-July, 2018 and we know that some people are upset because we may not have the size, or color, or style of the Xero Shoe that you want.
Clearly, it’s not our intention to run out of inventory and be unable to replace it in a timely manner. It’s happening for a few reasons, that I describe in this video:
Okay, so why can’t you always get the Xero Shoes you want? In short, the biggest cause is how fast we’re growing!
When we bring in a new product, or even bring in more of an existing product, we’re basically guessing how well it’s going to sell.
No company has ever gotten this formula perfect. If they did, there would be no TJ Maxx or Ross or Marshall’s or any of the other overstock and closeout stores.
But this is especially challenging for a new and rapidly-growing company like ours.
When we’re wrong — when demand is WAY greater than we expected — the issue morphs to one of timing and minimums.
When it comes to timing, it can take 90-120 days or more from the moment we place an order for product until it arrives in our warehouse (and that’s assuming there’s not a strike at the port, or that our container didn’t fall off the ship mid-ocean, or any other crazy scenario).
Thinking about our Genesis sandal — it sold 4x faster than we expected. If we ordered more now, or even a month ago when we saw the writing on the wall, we wouldn’t get that shipment until November. Not the best time to get a ton of sandals in the warehouse. Holding onto that inventory until sandal season picks up again in 4 months creates a serious cash flow issue.
So, for that product, we can’t responsibly bring in more until 2019.
Then, there are the minimums. We can’t simply call our factory and ask for a couple hundred pairs to fill in for a size or color that we’ve run out of. The minimum number of pairs we can order is in the thousands.
The problem this creates relates back to timing. That is, if that minimum is, say 8 months’ worth of inventory, but we were planning to to update the product in 5 months — by launching a new color, or making some tweaks to improve the product — then we’d be sitting on 3 months’ worth of product that we might not be able to sell.
Again, a company our size, bootstrapped by me and Lena, without venture capital funding, can be sunk by that kind of situation. And we want this ship to keep sailing.
I hope you’re starting to understand the complicated calculus of managing inventory.
It’s what keeps Lena and I up at night.
We know that when we outgrow this “awkward teenage” phase of our business, problems like this will become less likely. And we hope that the new products we bring in will excite you enough to make the memories of out-of-stock issues fade into the background (get yours before they sell out! 😉 ).
To hear about when we get “fill-in” inventory, make sure you’ve joined our newsletter list (see the bottom of this page) or joined the Xero Circle (top right in the navigation section of the page).
As always, Lena and I greatly appreciate your support and hope that you stick with us through our growing pains.
Make sure you’ve joined the Xero Circle (which, among other things, gets our newsletter into your e-hands) to hear about when we get more (and NEW) inventory. Click the link in the menu at the top-right of this page.