Understanding the Language of the Apparel Industry 101

2025 Version of Tthe Most Complete Guide to Apparel Software, Fashion ERP, Inventory Management, Warehouse Operations, and Apparel Industry Terms

The Language of the Apparel Industry

Clothing manufacturing companies, apparel businesses (wholesale and retail), warehouses, and any operation involved in the production or distribution of garments all speak a unique language. After 41 years in the apparel industry, I’ve picked up the full spectrum of this “industry language.” As a professor at multiple colleges and a managing partner at AIMS since the birth of our apparel software, I know first-hand that if you want to thrive, you must learn the internal semantics of the apparel and fashion industry.

Every day, apparel companies worldwide use hundreds of keywords, abbreviations, and acronyms to run their businesses efficiently—whether they're communicating with buyers, vendors, suppliers, or teams across continents. Mastery of this language is more than just jargon; it’s the glue of modern apparel software, fashion ERP, and efficient inventory management.

PLADS: The Five Pillars of Apparel Business

Let’s begin with an acronym I developed for my students—PLADS:

• Production/Manufacturing and Importing
• Logistics/Shipping
• Accounting/Finance
• Design/Merchandising
• Sales/Marketing

Just like your hand needs all five fingers to make a strong fist, your business needs all five PLADS pillars for strength and balance. If one is missing, the whole operation weakens. Today, the most resilient brands unify these pillars with robust apparel ERP software and fashion software—integrating people, process, and technology for seamless success.

Why This Language Matters

Business runs faster than ever before. The days of snail mail and handwritten orders are gone. In this digital era, your apparel ERP is the “muscle” in your hand, powering every function—while your people are the “joints,” directing movement and adapting. The best apparel companies automate order-taking, communications, shipping, reporting, and much more, reducing errors and speeding up results with integrated software.

Knowing the right acronyms, terms, and abbreviations lets you communicate smoothly with everyone—internally, with vendors, factories, retailers, and even regulators. Why so many acronyms? Convenience and speed. The global fashion industry demands it. As the saying goes, “Time is money.”

What is an Acronym? Why Are They Vital in Apparel?

Acronyms are simply abbreviations formed from the initial letters of words or phrases, used to save time and keep communication clear. For example, “Yves Saint Laurent” becomes “YSL,” and “Purchase Order” becomes “PO.”
In the apparel business, acronyms aren’t just for speed—they’re essential for consistency in documentation, software, purchase orders, EDI (Electronic Data Interchange), and global communication.

Key Acronyms in the Apparel Industry

Once you understand PLADS, the next step is learning the essential acronyms and terms that run every department and workflow in production, planning, inventory, warehouse management, logistics, technology, compliance, and sales.

Production & Planning

• UOM (Unit of Measure): Yards, gross, dozen, unit
• BOM (Bill of Materials): Complete list of all components and quantities for a product
• WIP (Work in Process): Goods in production, not yet in finished inventory
• OTS (Open to Sell): Stock + WIP – Orders = OTS (the available inventory ready to be sold)
• OTB (Open to Buy): Budgeted money or merchandise for future purchase, not yet ordered
• CMT (Cut, Make, Trim): Full-package garment production, domestic or offshore
• PCD (Planned Cut Date): The scheduled start date for cutting
• TNA (Time and Action Calendar): Full timeline and deadlines for all production steps
• Cut Ticket: Document authorizing and detailing fabric cutting
• Tech Pack: Comprehensive style specification including BOM, construction, size chart, colorways, packaging, etc.

Shipping & Logistics

• FOB (Free on Board):
  • FOB Shipping Point/Origin: Buyer pays shipping; responsibility passes at the seller’s facility
  • FOB Destination: Seller pays and is responsible until delivery
• CIF (Cost, Insurance, Freight): Seller pays cost, insurance, and freight to named port; buyer takes risk when loaded
• EXW (Ex Works): Seller makes goods available at premises; buyer pays and assumes risk from there
• DDP (Delivered Duty Paid): Seller pays all costs, duties, and taxes to buyer’s destination
• LDP (Landed Duty Paid): Total cost to buyer’s door, including transport, duty, insurance
• ASN (Advance Shipping Notice): EDI document listing incoming shipment details before arrival
• GRN (Goods Received Note): Confirmation of goods received and checked in
• BOL (Bill of Lading): Shipping manifest issued by the carrier
• POD (Proof of Delivery): Confirmation signed at receipt
• 3PL (Third Party Logistics): Outsourced warehousing, fulfillment, and returns
• 3PL Integration: Real-time software sync between ERP/fashion software and 3PL warehouse systems
• DC (Distribution Center): Fulfillment hub for shipping and receiving
• RTV (Return to Vendor): Return of goods back to supplier
• Cartonization: Determining the best box for shipment

Technology & Business Software

• CAD (Computer Aided Design): Digital design for textiles, patterns, and art
• CAM (Computer Aided Manufacturing): Automated cutting, marking, and digitizing
• CAB (Computer Aided Business): Any software automating business processes
• ERP (Enterprise Resource Planning): All-in-one business management software (e.g., AIMS360)
• MRP (Material Requirements Planning): Software for production and inventory planning
• PLM (Product Lifecycle Management): Manages all phases from design to end-of-life
• PIM (Product Information Management): Centralizes all product data and images
• OMS (Order Management System): Tracks the lifecycle of customer orders
• CRM (Customer Relationship Management): Manages contacts, sales, and support
• EDI (Electronic Data Interchange): Automated transmission of POs, ASNs, returns, invoices, etc.

Warehouse, Fulfillment, and Inventory Management

• WMS (Warehouse Management System): Software to manage every warehouse process—receiving, putaway, bin/GOH management, picking, packing, shipping, returns, and cycle counts
• Bin Location: Unique barcode/address for each storage spot (e.g., “A4-Bin7”)
• Goods on Hanger (GOH): Hanging storage for dresses, blazers, outerwear
• Flat Storage/Box Storage: For folded garments, accessories, boxed shoes
• Bulk Storage/Bulk Bin: Palletized or open-bin storage for prepacks, case packs, or overstock
• Zone Storage: Warehouse divided by function (e.g., Fast Pick, Bulk, Returns, Prepack, GOH)
• Staging Area: Temporary holding for goods awaiting processing or shipment
• Receiving/Putaway: Unloading, scanning, and assigning goods to storage
• Cycle Counting: Regular spot counts to ensure perpetual inventory accuracy
• Shrinkage: Inventory lost to theft, error, or damage
• Inventory Adjustment: Correction to inventory count (overage, shortage, shrinkage)
• Prepack: Pre-assembled packs of multiple sizes/colors for wholesale allocation
• Kitting: Assembling multiple SKUs into a single sellable package

Inventory Statuses

• On-Hand Inventory: Physical units in warehouse, ready for allocation/picking
• Available Inventory: On-hand minus allocated and reserved
• Allocated Inventory: Stock set aside for open sales or production orders
• Allocated Stock: On-hand units not yet picked/shipped
• Allocated WIP: Units in production or transit, already committed to orders
• Reserved Inventory: Set aside for special events or launches
• Safety Stock: Buffer against demand/supply fluctuations
• In-Transit Inventory: Shipped but not yet received
• Backorder: Ordered by customer, currently unavailable
• Inventory Hold: Temporarily blocked from allocation/shipping
• Return to Stock: Goods returned and QC’d before restocking

Sampling, Testing, and Product Development

• SMS (Salesman Sample): Prototype used for buyer approval
• PP (Pre-Production Sample/Meeting): Final prototype before bulk production
• Lab Dip: Swatch for color approval
• Shade Lot: Batch dyed together for color consistency
• Marker Efficiency: Percent of fabric used in cutting
• Lay Number: Number of fabric plies in a spread
• Cutter’s Must/Copy: Official reference document for cutting room
• Spec Cost/Cost Sheet: All projected and actual costs per style
• TDS (Technical Data Sheet): Material/test property documentation
• TF (Test Form): Testing record for compliance

Costing, Margins, and Accounting

• CMT Cost: Assembly/labor cost for cut, make, trim
• Landed Cost: All-in cost (production, freight, insurance, duty, fees)
• Standard Cost: Estimated per-unit cost for planning
• Variable/Fixed/Direct/Indirect/Overhead Cost:
  • Variable: Changes with volume
  • Fixed: Unchanged by volume
  • Direct: Tied to specific order/SKU
  • Indirect: Shared costs (utilities, QC)
  • Overhead: Total indirect business/facility costs
• Absorption Costing: Assigns all cost types to each unit
• COGS (Cost of Goods Sold): Total cost for goods sold in a period
• Gross Margin: (Sales Price – COGS) / Sales Price
• Markup: (Sales Price – Cost) / Cost
• Duty Rate: Import/customs tax
• FIFO/LIFO: First In/Last In First Out for shipping and cost valuation
• Average Cost/Actual Cost: Methods of inventory cost valuation

Barcodes, Labeling, Color, and Compliance

• SKU (Stock Keeping Unit): Unique code for every style/color/size
• UPC (Universal Product Code): Retail barcode for scanning
• GTIN (Global Trade Item Number): International barcode identifier
• NRF Codes: Retail color/size codes for EDI
• SID (Shipment Identification Number): Unique shipment code
• PN (Part Number): For trims/labels
• GSM (Grams per Square Meter): Fabric weight
• DPI (Dots per Inch): Print resolution
• SPI (Stitches per Inch): Stitch density
• PMS/RGB/CMYK: Color standards for print and production
• LC (Lab Color): Measured color data
• CSR (Corporate Social Responsibility), OEKO-TEX, GOTS, GRS: Sustainability and compliance certifications

Sales, Wholesale, Tradeshows, and Rep Terms

• Booth: Tradeshow exhibit space
• Appointment (Appt): Scheduled buyer meeting
• Showroom: Brand’s space for buyers and reps
• Lookbook: Visual catalog of collections
• Line Sheet: Document listing all styles, colors, sizes, prices, and deliveries
• Samples: Garment or product samples for buyers/production
• Trade Allowance: Incentive for market/show
• Badge: Event credential
• MAGIC/COTERIE/PROJECT: Major fashion tradeshows
• Rep: Sales agent/agency
• Order Form: Sheet for entering/submitting orders
• Territory: Geographic sales region
• House Account: Managed by brand, not by rep
• Confirmation: Order acknowledgment
• Cancel Date: Last allowed ship date
• Ship Window: Range of allowed ship dates
• Door: Retail store account
• SKU Rationalization: Reducing the SKU count for efficiency
• Market Week: Industry event for buyer meetings
• Buyer: Retail purchasing agent
• Ship Complete/Backorder/Split Order: Fulfillment and shipment methods
• Market Allowance: Market-specific promotion
• Rep Commission: Paid to sales agents/agencies
• Net Terms: Net 30/60/90, EOM, 2/10 Net 30, etc.
• Bulk Order/Preorder/At-Once Order: Order types for planning or immediate shipment

Logistics, EDI, Shipping & Integration

• FOB, CIF, EXW, DDP: International shipping/payment terms
• HTS (Harmonized Tariff Schedule): Import tariff code
• LC (Letter of Credit): Bank-guaranteed payment
• TT (Telegraphic Transfer): International wire payment
• INCO Terms: International shipping/payment rules
• ASN, GRN, BOL, POD: All documents for tracking, confirming, and processing shipments
• 3PL/3PL Integration: Outsourced logistics and digital sync with ERP
• DC (Distribution Center): Fulfillment/shipping hub
• RTV (Return to Vendor): Sending unsold/defective goods to supplier
• Carton (CTN): Packing/shipping unit

Additional Key Apparel Industry Terms

In addition to the core terms already covered in your glossary, these additional terms will help you better understand the fashion industry as it evolves. They cover important aspects of sustainability, product development, sales, fulfillment, and fashion marketing. By mastering these, you'll ensure that your apparel business is equipped with the knowledge to thrive in a rapidly changing market.

Sustainability & Compliance Terms

With the growing focus on sustainability, understanding these terms related to eco-friendly practices and compliance is essential for fashion brands:

• Cradle to Cradle (C2C): A design philosophy that promotes the creation of fashion products that can be reused or recycled in an environmentally responsible way.
• Circular Fashion: A business model in fashion that designs garments to be reused, repaired, and recycled, reducing waste in the industry.
• Vegan Leather: An eco-friendly alternative to traditional leather, made from synthetic or plant-based materials, commonly used in apparel production.
• Carbon Footprint: The total amount of greenhouse gases produced during the lifecycle of a garment, from raw material extraction to production, distribution, and disposal.

Product Development & Sampling Terms

These terms are vital in the fashion product creation and sampling process, helping apparel brands streamline design and manufacturing:

• Prototype: The first functional version of a fashion product created to demonstrate concept feasibility before mass production.
• Pattern Making: The creation of templates for garment pieces based on design specifications, such as size, fit, and style.
• Fabric Swatch: A sample of fabric used to show the color, texture, and material of the garment before committing to a full production run.
• Vendor Compliance: Ensuring suppliers meet the required standards in quality, ethical labor practices, and regulatory compliance for garment production.

E-Commerce & Digital Marketing Terms

These terms are key for fashion brands that rely on e-commerce and social media to reach customers:

• DTC (Direct to Consumer): A business model in which apparel brands sell directly to consumers via online platforms, bypassing traditional retail stores or wholesalers.
• Conversion Rate: The percentage of website visitors who complete a desired action, such as making a purchase or signing up for a fashion newsletter.
• SEO (Search Engine Optimization): The practice of optimizing content on a fashion brand’s website to improve search engine ranking, driving more organic traffic.
• PPC (Pay-per-click): A digital advertising model where fashion brands pay for each click on their ads, commonly used on social media platforms or search engines.
• Influencer Marketing: A strategy where fashion brands collaborate with influencers to promote apparel products across platforms like Instagram, TikTok, and YouTube.
• Affiliate Marketing: A marketing model where influencers or bloggers earn a commission for driving traffic or sales to a fashion brand’s online store via unique affiliate links.
• User-Generated Content (UGC): Content created by consumers or followers that feature a fashion brand's products, typically shared on social media, offering social proof and increasing brand trust.

Warehouse & Fulfillment Terms

For fashion brands, effective warehouse operations and product fulfillment are key for success:

• Cross-Docking: A logistics process used in the fashion industry where products are unloaded from inbound shipments and immediately loaded onto outbound transport without being stored in the warehouse.
• Pick-to-Light: A warehouse system used to guide workers to the correct fashion products based on customer orders, improving picking speed and accuracy.
• Voice Picking: A hands-free picking system in the warehouse, where workers receive spoken instructions on which fashion products to pick and where to locate them.
• Last Mile Delivery: The final step in fashion product delivery, where goods are transported from the warehouse directly to the consumer’s door.
• Prepack: A method of packaging apparel products, where sets of pre-defined sizes or colors of a garment are packaged together for efficient wholesale distribution.

Sales & Wholesale Terms

For fashion wholesalers, understanding key sales terms is crucial for managing orders and relationships with retailers and buyers:

• Sales Order: A document confirming the details of a fashion sale, including product quantities, prices, and shipping terms.
• Stocking Order: An order placed by retailers to replenish their fashion inventory, often after a successful season or launch.
• Prebook: A method where fashion buyers commit to purchasing apparel items before they are produced or released, ensuring stock availability.
• Consignment: A sales arrangement where fashion goods are placed in stores or with retailers, but ownership remains with the supplier until the products are sold.
• Order Acknowledgment: A document confirming the seller’s receipt and acceptance of a fashion order, including details on shipping terms and estimated delivery dates.

Returns & Reverse Logistics Terms

Managing returns is a critical process for fashion brands, especially in e-commerce:

• Reverse Logistics: The process of managing the return of fashion products, including recycling, repurposing, or refurbishing garments after they’ve been sold.
• Return Rate: The percentage of fashion products returned by customers, a critical metric for e-commerce brands to monitor.
• Return Merchandise Authorization (RMA): A process used for fashion returns, where a reference number is issued to track the return of items.
• Restocking Fee: A fee charged by fashion brands when customers return garments, usually for non-defective items, to cover handling and inspection costs.

Influencer & Social Media Marketing Terms

In the world of fashion marketing, social media and influencer partnerships are key to driving brand awareness and sales:

• Influencer Marketing: A strategy where fashion brands collaborate with influencers who have a large and engaged following on platforms like Instagram, TikTok, and YouTube to promote products.
• Sponsored Post: A paid post made by an influencer or content creator featuring a fashion brand's products in exchange for compensation.
• Micro-Influencers: Influencers with a smaller, yet highly engaged audience, often used by fashion brands to target niche markets.
• Brand Ambassadors: Influencers or loyal customers who consistently promote a fashion brand over a longer period in exchange for compensation, exclusive access, or free products.
• Engagement Rate: A metric used to assess how well a fashion brand’s content resonates with its audience, based on interactions such as likes, comments, and shares.
• Social Proof: The idea that people are more likely to trust or purchase from a fashion brand that is endorsed by influencers or features positive user reviews.
• Content Creation: The process of developing and producing visual content, such as videos, images, and blogs, specifically designed to market fashion products on social media platforms.
• Story Ads: Full-screen advertisements that appear on social media platforms like Instagram or Snapchat, designed to capture the attention of users in an engaging way.
• Influencer Network: A group of influencers, typically managed by an agency or the brand itself, who collaborate to promote fashion products across multiple digital platforms.

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Final Thoughts

Aside from being the industry’s leading apparel software provider, AIMS360 has taught “Understanding Apparel Principles and Costing” to aspiring fashion leaders for over 16 years at trade schools and universities like FIDM, Los Angeles Trade Technical College, Art Institute of CA San Diego, Cal Poly Pomona AMM, UCLA Extension, and Saddleback College Irvine.

By mastering these apparel industry terms, fashion industry terms, and the workflows of modern apparel ERP, fashion software, inventory management, and warehouse management, you empower your business to communicate, operate, and grow with true efficiency.

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Get a Demo of AIMS360: Experience Apparel Software Guided by Experts

Ready to take your apparel business to the next level? Discover how AIMS360—America’s leading apparel ERP and fashion software—can simplify your operations, centralize your inventory, and help your team move faster across every channel.

Request a free demo today, and our experienced implementation team will walk you through the platform, answer your questions, and share best practices tailored to your business needs. From day one, our specialists will guide you step-by-step through onboarding, data migration, integrations, and custom workflow setup—so you get results, not just software.

• See real-time inventory management in action
• Explore our flexible WMS, PLM, PIM, and 3PL integrations
• Learn how to streamline orders, production, shipping, and returns
• Get advice on fashion ERP best practices from industry veterans

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Frequently Asked Questions: Apparel Industry Terms, Fashion ERP, and Warehouse Operations

What is an Apparel ERP and how does it help apparel businesses?

An Apparel ERP (Enterprise Resource Planning) is specialized business management software designed for the unique needs of the fashion and apparel industry. It connects core operations—such as inventory management, order processing, production planning, accounting, sales, and warehouse management—into one digital platform.
Benefits include: real-time inventory tracking, streamlined sales order processing, automated EDI and 3PL integrations, advanced reporting, and support for complex style, color, and size matrix typical in apparel.

What does a Warehouse Management System (WMS) do for a fashion brand?

A Warehouse Management System (WMS) is software that optimizes every warehouse process—receiving, bin management, picking, packing, shipping, returns, cycle counts, and more.
For apparel, a WMS tracks inventory at the SKU (style/color/size) level, supports goods-on-hanger (GOH) and flat/box storage, enables barcode scanning, improves order accuracy, reduces shrinkage, and speeds up fulfillment for e-commerce, wholesale, and omnichannel orders.

What is the difference between Allocated Inventory, Reserved Inventory, and Available Inventory?

• Allocated Inventory: Inventory that is set aside for open sales or production orders. It cannot be double-sold and is removed from the available pool.
• Reserved Inventory: Stock held back for future launches, special events, or VIP customers, not tied to any current order.
• Available Inventory: What’s physically in the warehouse and not yet allocated or reserved—ready to be sold or assigned to new orders.

Why it matters:
This distinction prevents overselling and ensures accurate order fulfillment, especially in busy fashion brands using modern apparel ERP and inventory management systems.

What is a 3PL and what does 3PL integration mean in fashion software?

A 3PL (Third Party Logistics) provider is a company that handles warehousing, order fulfillment, shipping, returns, and sometimes value-added services like kitting or labeling for brands.
3PL integration refers to the direct connection between your apparel ERP or fashion software and your 3PL’s warehouse system. This integration keeps inventory, orders, ASN (Advance Shipping Notice), tracking, and returns in sync in real-time, eliminates manual data entry, and enables true omnichannel order fulfillment.

How does ASN (Advance Shipping Notice) improve warehouse receiving in the apparel industry?

An ASN is an electronic notice (often via EDI) that details the exact contents and packaging of an inbound shipment before it arrives at your warehouse.
Benefits:

• Enables “blind” or expedited receiving
• Prepares warehouse teams for incoming goods
• Reduces errors, accelerates putaway, and supports automated WMS workflows
• Ensures accurate inventory management for style, color, and size

What is the difference between ATS (Available to Sell) and ATP (Available to Promise)?

• ATS: The current inventory available to be sold and fulfilled immediately—not yet allocated to any order.
• ATP: Includes not only ATS but also inventory expected from open POs or production, minus what’s already committed to other orders.
  ATP helps sales and customer service teams answer, “When can we deliver?” with confidence, critical for wholesale and DTC brands using advanced inventory management.

How does batch picking, wave picking, and zone picking improve warehouse efficiency for apparel brands?

• Batch Picking: Picker gathers SKUs for multiple orders at once, reducing travel and increasing efficiency—ideal for brands with high SKU count or many small orders.
• Wave Picking: Orders are grouped into “waves” (often by shipping deadline or channel) to optimize throughput and picking labor.
• Zone Picking: Each picker is responsible for a specific area or “zone” of the warehouse—great for large facilities or when SKUs are stored by category or channel.

Modern WMS in fashion software uses these methods to accelerate fulfillment and reduce errors.

What is a prepack, and why is it important for apparel wholesalers and retailers?

A prepack is a case containing a predefined assortment of sizes and/or colors (e.g., 2S, 2M, 2L of a t-shirt), often required by department stores and big box retailers.
Benefits:

• Simplifies order entry, picking, and packing
• Speeds up replenishment and store allocation
• Reduces picking errors and streamlines warehouse workflow

How does apparel software handle style, color, and size matrices?

Apparel software, such as AIMS360’s fashion ERP or inventory management, is built to track products at every matrix combination: style, color, and size (and sometimes fit or inseam).
Matrix management means:

• Real-time visibility by SKU
• Accurate stock status for every style/color/size
• Efficient warehouse picking and order fulfillment
• Fast, error-free EDI, 3PL, and e-commerce integrations

What is BOM (Bill of Materials) and why is it crucial in apparel production?

A BOM lists every material, trim, label, and component needed to produce a style—down to the quantity and supplier.
It drives:

• Accurate costing and pricing
• Material purchasing
• Production planning
• Tech pack creation and PLM workflows

How does apparel ERP support omni-channel and DTC fulfillment?

Modern apparel ERP connects inventory, orders, and fulfillment across e-commerce, wholesale, brick-and-mortar, and 3PL partners.
Features include:

• Real-time inventory sync across all channels
• Automated order routing and allocation
• Unified sales and returns reporting
• Integrated picking, packing, and shipping for DTC and B2B

What is landed cost, and how is it calculated in apparel ERP?

Landed cost is the all-in cost to bring a product to your warehouse—including production, freight, duty, insurance, and any customs fees.
Formula:
Landed Cost = Product Cost + Freight + Insurance + Duties + Handling Fees
Why it matters:
True margin calculations, accurate pricing, and better negotiation with suppliers.

What is FIFO and LIFO in inventory management, and which is better for apparel?

• FIFO (First In, First Out): The oldest inventory is sold/shipped first—helps prevent aging and is preferred for fashion with seasonal goods.
• LIFO (Last In, First Out): The newest inventory is shipped first—less common in apparel.
  Apparel brands typically use FIFO to avoid markdowns and obsolete inventory.

What is a tech pack, and what sections does it include?

A tech pack is a detailed product specification document for factories.
Common sections:

• Flat sketches and design artwork
• BOM (Bill of Materials)
• Measurement/spec sheets
• Construction details
• Labeling and branding
• Colorways and size charts
• Packaging and folding instructions
• Testing/certification requirements

What are the benefits of integrating 3PL and warehouse management into fashion ERP?

Benefits:

• Real-time inventory and order sync
• Faster, more accurate picking, packing, and shipping
• Fewer manual data entry errors
• Seamless returns processing
• Visibility into every stage of fulfillment, even if using multiple 3PLs

What are the key metrics (KPIs) that apparel businesses should track?

• Sell-through rate
• Gross margin
• Inventory turnover
• Order accuracy
• On-time delivery rate
• Fill rate
• Return rate
• Open to sell (OTS) and open to buy (OTB)
• Shrinkage
• Weeks of supply

Modern apparel ERP and inventory management systems track and report on these automatically.

What is OTS (Open to Sell) and how is it calculated in apparel?

Open to Sell (OTS): The amount of inventory currently available for new orders after accounting for stock on hand, WIP (work in progress), allocated, and reserved inventory.
Formula:
OTS = On-Hand Inventory + WIP Inventory – Allocated Inventory – Reserved Inventory

What does “Allocated WIP” mean?

Allocated WIP means units currently being produced or inbound from a factory are already committed to specific orders, so they can’t be double-sold. This is essential for brands running prebooks or with long production lead times.

What is the difference between bulk order, pre-order, and at-once order?

• Bulk Order: Large-quantity order, often placed in advance for future delivery (used in wholesale, department stores, etc.).
• Pre-order / Prebook: Reserved before production or stock arrival, ensuring allocation when the goods come in.
• At-Once Order: For immediately available inventory, ships as soon as order is placed.

What is an OMS (Order Management System)?

An Order Management System (OMS) is software that tracks the entire lifecycle of customer orders—from entry and allocation to picking, shipping, invoicing, and returns. Many modern apparel ERPs include OMS as a core module.

What does OTB (Open to Buy) mean in apparel buying?

Open to Buy (OTB): A budget or plan for merchandise purchasing, calculated as the difference between planned purchases and actual orders placed for a given period.
OTB = Planned Purchases – On Order

What is cycle counting, and how does it improve inventory accuracy?

Cycle counting is a process of regularly counting a small subset of inventory (by bin, SKU, or zone) rather than shutting down for a full physical inventory.
Benefits:

• Real-time accuracy
• Reduced disruption
• Lower shrinkage and error rates

What is the role of BOM, CMT, and landed cost in costing garments?

• BOM (Bill of Materials): Lists every material/trim used.
• CMT (Cut, Make, Trim): Factory charge for assembly.
• Landed Cost: All-in cost, including BOM, CMT, freight, duty, etc.

Apparel ERP and costing modules calculate these for true profitability.

What are EDI and ASN, and why are they important for fashion wholesalers?

• EDI (Electronic Data Interchange): Automated digital exchange of business documents (orders, invoices, ASNs, returns) between systems—critical for doing business with large retailers.
• ASN (Advance Shipping Notice): Tells your customer or warehouse exactly what is being shipped, enabling fast, accurate receiving.

How do brands use tech packs and PLM software together?

Tech packs are created and shared via PLM (Product Lifecycle Management) software for collaboration between designers, product development, and factories. This speeds up approvals, reduces mistakes, and centralizes all style data.

How does apparel ERP software support sustainability and compliance?

• Tracks certifications (OEKO-TEX, GRS, GOTS)
• Manages supplier documentation and audits
• Ensures product traceability and responsible sourcing
• Streamlines compliance for international markets

What is a showroom, and what happens during market week?

A showroom is a physical or digital space where brands present collections to wholesale buyers and sales reps.
Market week: Scheduled industry event for showing lines, writing orders, and meeting with key accounts—critical for seasonal sales planning.

What are net terms in wholesale apparel, and what are common types?

Net terms define when payment is due after invoice:

• Net 30: Payment due in 30 days.
• Net 60/Net 90: Payment due in 60/90 days.
• Net 30 EOM (End of Month): Payment due 30 days after month end.
• 2/10 Net 30: 2% discount if paid within 10 days; full payment due in 30 days.

What is SKU rationalization and why is it important?

SKU rationalization is the process of reviewing and reducing the number of active SKUs to streamline operations, lower carrying costs, and focus on top-performing styles/colors/sizes.

How do fashion ERP and inventory management systems support returns and RA/RMA processes?

• Automate RA/RMA number generation for every return
• Track returns by reason code, original order, and condition
• Automate restocking or disposal after QC
• Enable transparent, fast returns for wholesale and DTC channels

What is FIFO, and how does it relate to inventory aging?

FIFO (First In, First Out) means selling or shipping the oldest inventory first, preventing aging or expired goods and supporting better margin management.

What’s the difference between a buyer and a sales rep in wholesale?

• Buyer: Employee of a retailer, responsible for choosing and purchasing products.
• Sales Rep: Agent of the brand, presenting products and managing wholesale relationships in a territory or account list.

What is a line sheet, and how is it used?

A line sheet is a document that lists every style in a collection, with images, colorways, size runs, wholesale and suggested retail prices, delivery windows, and order minimums—used by buyers and sales reps during order writing.

How does barcoding improve accuracy in apparel warehouse management?

• Every SKU, carton, and location is tracked by barcode
• Scanning at every stage (receiving, picking, packing, shipping, returns) prevents mistakes
• Real-time WMS integration ensures perpetual inventory accuracy

What are best practices for implementing apparel ERP and warehouse management software?

• Clean and standardize data (SKUs, BOMs, customer/vendor lists)
• Map and barcode all bin locations and warehouse zones
• Train all users on scanning and system workflows
• Integrate 3PL, EDI, and e-commerce platforms for end-to-end visibility

What are the most important apparel industry terms to know when starting a brand or wholesale line?

Some must-know apparel industry terms:
Apparel ERP, fashion software, PLM, WMS, 3PL, ATS, ATP, BOM, SKU, UPC, COGS, OTS, WIP, ASN, EDI, tech pack, cut ticket, net terms, gross margin, landed cost, prepack, showroom, lookbook, line sheet, backorder, cycle count, allocation, goods on hanger, bin location, market week, rep, buyer, open to buy (OTB), return to vendor (RTV), and many more!

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