Retailers use data rather than "gut instinct" to manage their inventory levels. An OTB plan typically factors in: The projected revenue for the period. Current Inventory: The physical stock already on hand. Projected Markdowns: Discounts expected during the period.
Ensures key products are available when customers want them. open to buy definition
The target stock level for the end of the period. Why Retailers Use It Retailers use data rather than "gut instinct" to
Helps identify slow-moving inventory, allowing for faster stock rotation. Projected Markdowns: Discounts expected during the period
is a financial budget and retail planning process that calculates the amount of merchandise a retailer can purchase within a specific timeframe. It acts as a guardrail to ensure businesses remain within their financial goals while maintaining enough stock to meet customer demand. Key Components of OTB
For a deeper dive into retail planning, resources like the Shopify Retail Blog and Board's Glossary offer detailed guides and formulas for different business sizes. AI responses may include mistakes. Learn more
While specific variations exist, the fundamental logic behind OTB is: