With your projected sales and turn rates in each department for the next 12 month, you have been able to calculate your IDEAL BEGINNING INVENTORY for each month. Your Annual Turn Rate divided into 12 times your sales for each month yields the Ideal Beginning Inventory for each month. Once you have the ideal beginning inventory for the current month and compare it to your ACTUAL beginning inventory for the month, you will see where you are over or under stocked. This becomes the first real benefit of setting up an open to buy plan.
Most retailers see that they are over stocked and the best plan is to “bite the bullet” and clean house and let your open to buy keep you in line going forward. Excess inventory is probably not going to sell at full price anyway since your customers have seen it sitting in your store for a while now and every time they see it, it gives you a “fashion black eye”. Turning that excess inventory into cash (even though you will lose the contribution to overhead and profit on it) will give you cash to pay bills, promote and do other things to help your store. And your OTB system will stop you from overbuying as you go forward.
The information in this and the following blog posts will help you on your way to an OTB plan and we are always available to answer your questions. The truth is that it is dramatically more cost and time efficient to subscribe to myotbplan.com. But whatever gets you using open to buy, we want to help.
myotbplan.com is the best open to buy system available! It’s easier, more accurate, more accessible, better supported, the only one that’s guaranteed and has no contract. You have nothing to lose and so much to gain. Call 310-829-5148 today with your questions or just fill out the no obligation Subscribe form online and we’ll call you. Why wait?
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