What a great idea. We’ll bring in lots of customers and fill the registers. Everyone will have fun and we’ll reduce our stock and make room for more merchandise.

There are some flaws with this great plan and I present them so you will see the problem with having sales.

Error No. 1: Sales create sale customers. Do you really want to train your customers to be sale shoppers? Do you want them coming in during non-sale time and asking when things will be on sale? No, you want them to come in to see what’s new and to value your selection, your friendly, helpful service and the atmosphere you set up in the store.

Error No. 2: Sales COST money in more than one way. You will need to get the word out and that costs. You will need to have your staff do extra work to get ready and to return the store to normal afterwards and that costs. And if you are reducing the price of current merchandise for the sale, those markdowns will be your biggest cost.

Error No 3: If you are having a sale to make room/pay for new, incoming merchandise, you are just creating more problems and more markdowns.

The real solution is to have the right amount of merchandise, turn it over in a timely fashion selling it at full price so you are able to pay your vendors, your overhead, and yourself. No, it’s not a dream sequence; it’s open to buy planning. Not only is open to buy the right way to plan and control your buying, it’s really the only sensible method to insure your store is profitable.

By planning your buying/inventory based on what you anticipate selling and the rate you want to turnover your merchandise dollars, you will have a formula for success. No matter how well you know your store, your customers and your merchandise, you cannot plan your buying in your head and expect to get it right. There are just too many variables to consider.

One major benefit of open to buy is that you will be working to eliminate all of the negative effects of having sales. Since your buying will be on target and the merchandise quantities appropriate to move into and out of the store on schedule, there will be very little, if any, merchandise to “get rid” of. So, you will no longer be training your customers to be “sale” customers. Now you can concentrate on encouraging them to make immediate buying decisions since the next time they come in that item will be gone.

Your customers will view you differently. Your vendors will view you differently… and so will your banker!

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