After 30 years speaking with retailers about open to buy, I think most realize that using open to buy would be beneficial. And it is. But most also think that it’s very complicated and would be an enormous time suck and they’re not willing to deal with that. So they keep doing it in their heads. And they keep having problems.
We don’t like to admit that we are screwing up, especially in our own stores. There’s a lot of ego at play running a store. But if you want to feed your ego AND your wallet, you’ll jump on open to buy planning just as soon as you can. Sure, you’ve got a system that’s helpful – “we just bought what we bought last year and add “X%”, or “we just buy the things we know will sell”, or “our vendors look out for us and would never sell us too much” or …
Most retailers are really good at selecting items that will generate excitement and sell well in the store. That’s their creativity at work. And it’s not the great items that cause the problems, it’s the invoices, the excess invoices that cannot be paid out of income that create the problems and the markdowns and the trips to the bank. As I’ve been quoting for many years: “Buying the right items brings in the customers, but buying the right quantities brings in the profits!”
So, if you want to buy the right items in the right quantities for delivery at the right times, you need open to buy planning. It’s absolutely the only way to insure that you support the sales you expect at the turn rates you want to achieve. Turnover is critical in the mix as it is the major difference between investing in your inventory or investing in another company. With retail (and open to buy planning) you can control turnover and consequently control your profitability.
Open to buy planning incorporates your current inventory, your future sales, and turnover in each department. Sales and turnover will yield ideal future beginning inventories. Now when you do the calculations, you will need to adjust the turn rates to reflect the sales impact of each month and remove any negative open to buy amounts from your calculations. OK, I’ll admit, it’s a bit complicated.
But the good news is that there are many open to buy systems and software available. They all have benefits and liabilities and most are pretty pricy. And retailers don’t like spending money on anything they cannot resell. There is one system available that is head and shoulders above the rest and within any retailer’s budget and that’s myotbplan.com. myotbplan.com does everything that a retailer needs to develop a solid buying plan based on anticipated sales and desired turn rates. And it does it easily and in a way that any retailer can follow and understand. Everything in the system is sequential, so it’s one step after the other in logical sequence whether you’re setting up the system or closing out the month and making revisions.
Once you look through the web site and make contact with our office, you’ll begin to wonder what it was that previously scared you about open to buy and why you waited so long to start planning your buying the right way.