A long time ago, I coined the phrase, “Buying the right items brings in the customers, but buying the right quantities brings in the profits.” And, of course, it’s still true. Most retailers have little trouble finding great items to fill their stores and enchant their customers. You know your customer, their tastes, their buying habits better than anyone. The problem comes when you buy too much to meet the demand.
When retailers get to market their senses are on overload because of all the great merchandise available. The reps are all telling you that every item is a “must have” and that if you don’t buy heavily you will miss sales. So, what else can you do but load up? That’s the problem in a nut shell because when you go to market or see a rep in your store without a buying plan based on anticipated sales and desired turn rates it’s hard to say “no” and you will wind up buying too much. And, too much of a good thing is a bad thing.
Retailers are always worried about missing sales and if you’re buying properly, you will do just that. You cannot be all things to all people at all times. If you are, you won’t be in business very long. Merchandising is a flow concept and it’s impossible to the proper amount of merchandise flowing in and out without an open to buy plan (OTB). When you have your OTB plan in place, you will also be a more discerning buyer. Instead of buying everything you find appealing, you will learn what is available and buy the best of it to meet your dollar plan. And since your plan is based on your projected sales and your desired turn rates. You will always be buying the best items in the right quantities and that will result in constant profits.
