Do you know what turnover is? How to calculate it? What it means to your buying and your bottom line? Do you know how to use it? Do you know your current turnover in your store? In each merchandise department?
Every store is driven by two elements – sales and turnover. An open to buy system is driven by the same two elements. Space is not a part of the equation. You need to buy to support your anticipated sales not to fill space. Turnover will help you determine the correct quantities to buy.
You can control your turnover through your buying and control your buying with open to buy planning. The more you turn, the more you make, so keeping a smaller investment in inventory and turning it faster will enable you to pay your vendors and make larger contributions to overhead and profit.
Retailing is a constant juggling act. You are always trying to achieve maximum sales at the highest possible turn rates. If your turn is too high, sales will be missed. If your turn is too low, merchandise sits and must be sold after the season at reduced prices. Open to buy planning will enable you to achieve the highest sales with the lowest inventory and the best return on your invested dollars.
The key to retail profitability is turnover and the key to higher turnover is open to buy planning.