The holidays are here and retailers are focused on making their stores as attractive as they can to bring in anticipated sales.  Many are depending on these next two months to save their year.  But as you load up your store for holiday selling, are you keeping in mind that your focus should be on January for two important reasons?

So many retailers go into the holidays with more stock than they can sell feeling they don’t want to miss any possible sales.  But, while more merchandise may indeed mean a few extra sales, more merchandise also guarantees markdowns.  If you’re not careful as you head into January, you may find that the amount of markdowns you must take to rid yourself of the surplus merchandise you stuffed in for the holidays will basically remove the profits and most of the overhead generated by the holiday sales. 

It’s not good enough to make sales.  You must make profit.  Your accountant may tell you how good things look, but your profits are probably buried in excess inventory and you will find yourself searching for cash to pay your overhead and vendor invoices.  That generally means markdowns or finding an outside injection of working capital to enable you to stay current.  But that’s a temporary fix as each markdown robs you of more contributions to overhead and profits.  This is not the way it’s supposed to be.

So, your planning should not be solely about the holidays, but must look forward to starting January with the right amount of merchandise to support expected sales at desired turn rates, not with markdowns.

And January needs to be reckoned with in terms of the trade shows.  You will be out buying all of the new, exciting merchandise for spring and summer.  If you’re still bogged down with excess holiday merchandise it’s tough to think straight about what your vendors are offering.  But you don’t want to miss out, so you’re going to place orders and, perhaps, compound your problems.  Sadly, this is what most retailers continue to do until they run out of money.

So, how can you solve both of these problems at once (and all of your future problems as well)?  Simple.  Open to buy (OTB).  Setting up an OTB plan will tell you where you stand with your current inventory in relation to your expected sales and if you are overbought for the future or have additional dollars to commit.  OTB allows retailers to have a map to get them to their goals.  OTB allows retailers to make course corrections in their buying as they see trends developing and keep their buying on target.

Of course, you’re reading this on our site.  Whether you employ or some other service or software, OTB needs to be in your future, and more importantly, in your present.  Now is the moment in your retail life to get on board with OTB.  Naturally, we hope will be your choice because it is the best value, most accurate, best supported, most accessible and guaranteed.

So, now is the time to get prepared for January.  If you don’t, you may not be around to plan for the January after that.

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