Open To Buy

Open to Buy is essentially a financial budget for retail merchandise. Used correctly and diligently this will greatly improve the financial performance of your retail operation. Open to Buy involves a planning process that is future orientated, provides you assistance on how much merchandise to buy, and provides benchmarks for evaluating and adjusting future plans. The business goal is to stock the right amount of products at the right time, thus reducing markdowns and maximizing profits. Fashion and seasonal merchandise benefit from this plan more than everyday stock. The reason being, is change, you need the right tools to forecast the appropriate and specific type of merchandise that will sell.
Taking the time to form a realistic plan will give you the numbers you need to maintain the correct amount of inventory and improve your overall purchasing power.

Open to Buy is available in many retail software packages as an add-on module. Only a few software companies contain it in their core package, but with the right knowledge and a little research you can set up your own Open to Buy plan in a simple spreadsheet.

To learn more about Open to Buy here are two informative articles that give useful examples to better understand the full range of planning.

Retailing: What is an Open to Buy

Open to Buy Planning: Controlling Your Inventory