Two things to remember in this discussion – 1) not all open to buy systems are the same, and 2) garbage in, garbage out.
Your open to buy system is the most important merchandising tool in your store. If it’s not accurate, it’s going to cost you. If your goal was to buy or subscribe to the cheapest open to buy available, you’ve made a bad investment. While the general principals of open to buy planning are seemingly simple, how one goes about coming up with a plan varies widely.
Accuracy means more than just correct calculations, it means that the process takes into account monthly sales fluctuations and uses that information to adjust turn rates. Accuracy means more than one pass when the calculations are run to insure that there are no negative open to buy figures. Accuracy means having the ability to make adjustments easily at the conclusion of each month to insure that your buying stays on target.
Many retailers get an open to buy system and then ignore it. Many see it as an accounting tool (it’s not) and just blindly put in required information. Many systems are set up to give reports that look good, but don’t do anything to aid the retailer going forward.
Your open to buy system should not only be accurate and take you through all the necessary steps each month in an easy, orderly fashion, but it must allow you to see what you have accomplished against your projections and make revisions going forward. Open to buy is a tool, but it won’t work without YOU! If you give it the figures it needs and the necessary evaluation time, then, YES, you can believe what your open to buy plan is telling you.
The big trick is not only to believe in the figures, but to take action. It’s too easy to buy and much harder to sell. You should want your store to be a lean, mean, money making machine. Having an accurate open to buy and giving it the time necessary and then following the numbers will do wonders to your income.