Beauty Best-Sellers Under Supply Pressure: Replenish by Quota, Reallocate by Demand
At the beginning of the week, a brand’s headquarters sets the ordering quota for each store for a popular sunscreen product. Midweek, one store sells faster than expected and hopes to order more during its second replenishment, but the next shipment has not yet arrived at the central warehouse.
When a store requests additional products, headquarters needs to assess several factors: how long the current inventory can support sales, whether the additional stock can arrive before the sales peak, and whether the request will affect supply arrangements for other stores. For best-selling products, ordering quotas provide the basis for store replenishment when supply is limited. When sales conditions change, the merchandising team also needs to adjust allocations according to actual demand and available supply.
Replenish According to Remaining Quota
A store may place multiple orders in the same week. The amount it can order each time needs to be calculated based on the quota already used during the current period. Looking only at the original total quota may lead to the same quota being used repeatedly for the second or third order.
Suppose a store has a weekly ordering quota of 120 units of sunscreen. Its first order of 80 units has already been counted against the quota, and the store wants to order 50 units in its second order. At this point, the store has 40 units of remaining quota.
| Ordering Situation | Quantity | Impact on the Second Order |
|---|---|---|
| Weekly ordering quota | 120 units | Basis for controlling the total order quantity during the period |
| Quota used by the first order | 80 units | Must be deducted when calculating the quantity available for the next order |
| Remaining quota | 40 units | Maximum quantity available for the second order under quota control |
| Requested quantity for the second order | 50 units | The additional 10 units require headquarters approval before being added |
When quantity validation is based on the remaining quota, the 50-unit order cannot be submitted directly at its original quantity. If other ordering conditions permit, the store can revise the order to 40 units. If it genuinely needs 50 units, it should first submit an additional-demand request. Headquarters can then approve the request and adjust the quota before the order is submitted.
The quota indicates how much the store may order during the current period. It does not mean that an equal amount of physical stock has already been reserved in the warehouse. Actual supply still needs to be confirmed based on available inventory and delivery arrangements.
Reallocate Based on Sales Changes
After a store submits an additional-demand request, the merchandising team first needs to determine whether the request is justified. Recent sales, available store inventory, inventory in transit and the next expected arrival time can together indicate the store’s replenishment gap. Temporary demand caused by a promotion should also be assessed based on whether the products can arrive before the campaign begins.
The team should then check the supply available for additional allocation. Some of the remaining central warehouse inventory may already be committed to other stores. Stores that have not yet placed orders may also need replenishment before the next shipment arrives. These demands should be considered together to avoid meeting only the request of the store that applied first while affecting the original sales plans of other stores.
In the example above, if headquarters confirms that 10 additional units can be allocated, the store’s weekly quota can first be increased from 120 units to 130 units. After deducting the 80 units already used by the first order, the remaining quota becomes 50 units, allowing the store to submit its second order accordingly. Once the additional quantity and delivery time are confirmed, the store also has a clearer basis for planning subsequent sales.
If the additional quota comes from another store’s allocation, headquarters should confirm that the transferring store can still maintain normal sales. The quotas of both stores should be adjusted at the same time. When routine replenishment and temporary additional demand use the same supply, they should also be included in the same supply plan, with a clear distinction between quantities covered by the existing quota and quantities requiring headquarters approval.
Quota management should provide a clear basis for routine ordering while allowing genuine changes in sales demand to be handled in a timely manner.
Integrating Quota Management into Store Ordering with PEKON
PEKON’s suggested ordering function supports the maintenance of ordering quotas by organizational unit, product and validity period. It can display the total quota, ordered quantity and remaining available quantity. Headquarters can use this information to review quota usage across stores and maintain or adjust quotas according to supply arrangements.
When quota management works together with order quantity validation, stores can place orders according to their remaining quota. The relevant validation rules need to be configured, enabled and linked to the applicable order types. Maintaining quota records alone does not mean that every order will automatically be restricted.
The remaining quota can also be used as a basis for calculating suggested order quantities. Suggested quantities provide a reference for store ordering. After the store manager adjusts the quantity, the order must still comply with the applicable order rules. During implementation, the project team should clarify at which stage an order quantity is counted as “ordered quantity” and how the quota should be handled after an order is modified or cancelled. This ensures that the remaining quota used for the next order remains consistent with the actual business progress. “Ordered quantity” should not be directly understood as the quantity already shipped or delivered to the store.
By coordinating quota maintenance, suggested quantity calculation and order validation, PEKON integrates headquarters’ allocation decisions into the store ordering process and provides a clear quantity basis for routine replenishment and subsequent quota adjustments.
If your brand also needs to manage inventory reservations for customers purchasing limited-edition products, you can read “How Can Limited Releases Prevent Overselling? Coordinating Quotas, Stock Locking, Cancellation and Release.” That article focuses on customer orders and inventory reservations, while this article focuses on quota management when stores place orders with headquarters. For discussions about beauty best-seller quotas, additional store demand and existing ordering processes, please contact PEKON for a solution consultation.