Everything in life is a balancing act, especially in retail. If you keep your balance, you come out ahead. If you lose your balance, you’re in trouble. Too many people ignore this principal and too many of them are retailers.
The biggest balancing act for any retailers is between items and quantities. It’s just too easy to think that you want it all in your store for your customers. That will certainly satisfy your customers, but if they don’t buy everything, you will be left with unpaid invoices which leads to markdowns and losses.
You know how much you will sell, so why go overboard with your buying? If you have an “open to buy” plan, you won’t. If you know how much to buy, you will select the best merchandise available in the right quantities. That’s an unbeatable combination and will keep your inventory lean, balanced, turning quickly with few markdowns and positive cash flow.
Even though you feel you can do this in your head, you can’t. There are too many variables. A good open to buy plan will deal with all those variables and yield a buying plan to support the sales you expect at the turn rates you desire. Your customers will be satisfied, your vendors will be paid and you will take home a profit each month.
You need balance in your store between great items and the right quantities. Open to buy planning will maintain that balance!