The purpose of open to buy planning is to insure that your buying (and receiving) is as close to your sales and turnover projections as possible. Trying to figure out what would happen if sales increased or declined is really a job for the end of month analysis to enable you to spot trends and make plan revisions to keep you on track.

Sales are not a product of inventory levels. Of course it is necessary to have adequate inventory to support sales, but beyond that, you are just creating markdowns. Sales are a product of your promotion, displays, store layout, item selection and sales personnel. Having an overwhelming amount of inventory will probably do more to discourage sales than encourage them.

Consider your own experience when entering another store to buy something. Do your eyes guide you easily to your merchandise goal, or are you bombarded with too many visual stimuli to allow you to find what you came in for?

As buyers in the marketplace looking for merchandise for your store, it is easy to be overwhelmed by the abundance of available goods and the encouragement of the reps to buy more. It is only with open to buy planning that you can know what your quantitative needs are and properly evaluate what is available to insure you buy the best merchandise to fill your dollar plan. Since your plan is based on your anticipated sales and your desired turn rates, staying within your OTB plan is absolutely the best thing you can do if you want to keep your store financially viable.

And while it’s fun to think about better sales and buying more, you need to actually build your sales before you commit to more merchandise. You can always get more merchandise (no matter what the reps tell you), but you can’t always sell it. So, for OTB, keep it real!


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