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You already know that you have more “balls” in the air on a daily basis than anyone should have to deal with. You are beset with constant personnel decisions, merchandise decisions, overhead decisions, and more.

But the real juggling for every retailer is their attempt to balance sales and turnover. If you leave these two to chance or only concentrate on one, you will find that your business will suffer one way or another.

We all know how important sales are. Sales provide us with the cash to continue to pay our bills and keep the doors open and hopefully make a profit. But sales are a finite commodity. Of course we want sales to always rise, but statistics tell us that won’t happen. We do everything we can to encourage sales – we advertise, we create a welcoming environment, we do mouth watering displays, and, of course, we buy plenty of great merchandise. We all know that if the items are great, the customers will come.

Now, here’s the “rub”. Like I just said, sales are finite and will rise and fall based on many factors, some of which you have no control over. If you could count on sales only going up, life would be pretty simple, but even a chart of each year shows that sales rise and fall depending on the month. They rise and fall depending on the economy. They rise and fall based on the competition.

It would seem that it should be easy to make money when sales are on the rise, but that’s not always the case. And when sales are falling, is it possible to still be profitable? Now you’re starting to see where the juggling comes into play.

The other commodity in our juggling act is turnover. Turnover is every bit as important to your store as sales are. While sales bring in the cash, turnover insures that you will wind up with a profit. Turnover is what sets retailing apart from other investments as it allows you to control how much money you make by controlling the amount of inventory you buy.

Because this juggling act cannot be done in your head – even though many retailers feel they can do so – there is “open to buy” planning that will tell you how much merchandise to buy based on how much you think (realistically) you will sell and the rate that you want to turn over your inventory investment. A good open to buy plan will take into account the variations in the months and the changes in the seasons. It will enable you to create a buying plan that has your merchandise arriving at the right time to support your anticipated sales at the turn rates you want to achieve. Your open to buy plan will help you make your “juggling decisions”.

So, the juggling has you trying to achieve maximum sales while also trying to achieve the highest turn rates possible. Now, the higher you set the turn rates, the lower your projected inventory will be to support your sales, but don’t let that bother you. A good open to buy plan will show your sales trending lower when you do your monthly analysis and if it’s because your inventory is too thin, you will simple lower your turn rates and bring in more inventory. But I have to tell you that very few retailers get into that rarified area as the natural inclination is to overbuy. Overbuying always leads to excess invoices, markdowns and cash flow problems.

The two important items on your to do list should be to have a great open to buy system and keep it current and follow what it prescribes. Myotbplan.com is based on these principals and guides you easily to develop your buying plan. It takes less time and money to use myotbplan.com to plan and control your buying than it does to markdown all of the excess merchandise that’s building up in your store because of your overbuying.

When you use myotbplan.com, you’ll find that your merchandising decisions are easier and more accurate and you’ll have the time to deal with all of the other “balls” that you’re juggling.


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