Back in 1970, a sales rep who had become a close friend asked me what kind of turnover I was getting in my store. I figured it out and told him “4 times”. He asked if I was figuring my inventory at cost or retail. Of course, I said cost. He explained that it needed to be retail to retail or I would get an inflated number. Of course, he was right and my actual turn was 2 times, not healthy in fashion retailing.
He suggested I bring in a consulting firm to figure my OTB with the goal of raising my turnover. I agreed and after a long meeting, the came back a week later with their plan. I’m a reasonably bright fellow and what they presented made no sense, so I said “No thanks” and set out to make my own OTB plan. It took me a year, but what a difference it made.
I had moved to a larger store to house more inventory (mistake) and had constructed the interior with bins and drawers to maximize the amount of inventory we could hold (mistake). Realizing the error of my ways, I worked on my OTB plan and halted any buying… for a YEAR! During that year, our sales actually grew and we rarely missed a sale, that’s how over stocked we were. Back then, things were not changing as fast as today, so I got away with it, but you can’t or your customers will go somewhere else.
When I instituted my OTB system (which I didn’t really understand), it worked. I took my turn rate from the 2x to an 8x while my sales continued to grow. I backed the turn down to a 6x because I didn’t want to thin out my inventory too much. We missed a sale here and there, but I learned you cannot be all things to all people at all times or you won’t be able to pay your bills (or yourself). My OTB system saved me from bankruptcy and I loved it.
When I sold the store and showed the new owner how the system worked, I was off to new ventures, but in the back of my mind, I always wanted to help other retailers with my OTB system. About 10 years later, I spent almost two years working on the system and made it generic so it could be used by any retailer no matter what their product mix. I packaged it as a paper based system with forms and instructions called THE OTB BOOK. It started slowly, but gained traction through articles in trade publications and seminars I gave at trade shows. A couple years later, we wrote it into software which gradually took over the paper system. When Y2K came along, we rewrote the software and made it so much better.
In 2008 when the economy tanked, I thought I’d retire and I did for a short time. But then I got the opportunity to put my system on the internet and after a ton of programming, MYOTBPLAN.COM was born. The response has been really good. More and more retailers are understanding the importance of OTB and more are coming to MYOTBPLAN.COM because of the benefits. It’s easy to use, affordable, accessible from any device, accurate, supported 10/7, has no contract and is guaranteed to improve your buying, inventory position and cash flow.
I loved what MY OTB plan did for me in 1970 and you’ll love what MYOTBPLAN.COM will do for you in 2016.