What is OPEN TO BUY?
OPEN TO BUY is a mathematical process that enables retailers to forecast their buying needs into the future based on anticipated sales and desired turn rates. The OPEN TO BUY process works with departments or categories rather than vendors or items, because the vendors and items will constantly change, but the departments remain somewhat stable. Even then, as the months come and go, the needs in each department will rise and fall, so it is critical to have a buying plan that has the ability to react to these changes.
How Does OPEN TO BUY Work?
Sales are a large component of OPEN TO BUY planning, but so is TURNOVER. TURNOVER is the rate at which a retailer depletes his inventory and is figured on an annual basis. Because of the great differences in the months, the annual turn rates need to be adjusted to reflect the sales impact of each month. With sales and TURNOVER, ideal beginning inventories can be determined. The OPEN TO BUY calculation will determine how much to buy in each merchandise department each month for the next 12 months. When this OTB plan is compared with outstanding orders, it is easy for the retailer to see where he is overbought or still has dollars to commit.
Who Needs OPEN TO BUY?
Actually, any retailer that is buying future delivery merchandise needs OPEN TO BUY. When merchandise is seasonal, changing in fashion, or has a limited shelf life, OPEN TO BUY is critical. Even though the merchant knows his area, his customer, and his store, without OPEN TO BUY he will be guessing about quantities. While picking great items is important, ordering the right quantities is critial. The process is complicated and cannot be done PROPERLY in your head or even on a spreadsheet. There are too many variables.
Why our OPEN TO BUY SOFTWARE?
As important as OPEN TO BUY is to a retailer, so is the ability to easily use it in a productive manner. Our OPEN TO BUY SOFTWARE is on the internet making it much more accessible and not limited to a single computer. Our OPEN TO BUY SOFTWARE is easy to use with explainations for every screen on that screen. Additionally, our SOFTWARE is supported by phone and email every day of the year.. Our OPEN TO BUY SOFTWARE requires NO contract and is GUARANTEED to improve your buying, inventory position and cash flow..
Why is TURNOVER Important?
The ability to control TURNOVER is the advantage of Retailing over other types of investments (and your store is a major investment). Most of the dollars you sink into your store are gone once they are spent. Chances of recovering your leasehold improvements, furniture and fixture cost is doubtful. What you have left to work with is your investment in inventory. Turning over this investment allows you to pay your vendors, contribute to overhead and take a profit. Simply put, the more you turn, the more you make. Capital sitting in non-turning inventory is depreciating and losing value. Once markdowns are started, the contribution to overhead and profits are lost. Only by monitoring and raising TURNOVER can a merchant insure being profitable. The only way to control and raise TURNOVER is with OPEN TO BUY planning.
Why Does OPEN TO BUY Improve Buying?
Retailers love merchandise and tend to overbuy. Sometimes they overbuy at the encouragement of the manufacturers who offer discount, dating and other deals to encourage the retailers to buy more. Buying is easy, or so it would seem. Buying the best items in the right quantities requires OPEN TO BUY planning. When a retailer faces a representative in his store or at a trade show it is imperative that he has an OPEN TO BUY plan to guide his purchasing decisions. Because an OPEN TO BUY plan will limit a retailer to buying what is actually needed and can be sold, having this plan will make the retailer do a better job of “shopping” the market and finding the best available merchandise to meet his retail dollar buying plan.
Why Do Retailers Need OPEN TO BUY?
Without OPEN TO BUY planning, retailers are just guessing about their needs and that causes overbuying, bloated inventories, excess invoices, markdowns and cash flow problems. Suppliers push retailers to order far ahead and encourage them to buy MORE. Without OPEN TO BUY controls, retailers are at the mercy of vendors because they fear missing sales of products they think they must have. All these fears can be laid to rest with OPEN TO BUY planning. Retailers will know exactly how much to order in each merchandise category, each month for the next 12 months. When OPEN TO BUY is used to plan and control buying, retailers find their inventory leaner, better balanced, turning faster with their markdowns reduced and their cash flow improved.
Will more inventory create more sales?
ABSOLUTELY NOT! Every store will sell a certain amount of erchandise. Yes, it will always try to sell more, but if that happens, it is a result of promotion, sales staff, and displays, but NOT inventory levels. What is important is having the right amount of inventory in the right category at the right time. Simply buying MORE creates bloated inventories, excess invoices, markdowns and cash flow problems.
When Should A Retailer Begin an OPEN TO BUY?
An OPEN TO BUY plan should be in place before a retailer leases or builds a store or designs a web site. The reason for this is to get underway with the right amount of merchandise based on anticipated sales and desired turn rates rather than guessing and starting with problems. An OPEN TO BUY plan will also help a retailer lay out the store interior so that it accommodates the planned merchandise. If a retailer starts with OPEN TO BUY, he is almost assured of success as he will open with an inventory that is as close to optimum as possible and be able to make necessary revisions going forward.
Why Choose My OTB Plan?
While there are many OPEN TO BUY products and services avalilable, MYOTBPLAN.COM is the most accurate because of extra adjustments taken to insure retailers are prepared for their strong selling months, but also that they go into their weak selling months with the correct amount of inventory. MYOTBPLAN.COM is easy to use, has explanations for each screen, is accessible from any device, and is supported 10/7 by the developer. MYOTBPLAN.COM is also guaranteed to improve any retailer’s bottom line if they use the system as directed and take advantage of our support. No other OPEN TO BUY system or software stands behind their product like MYOTBPLAN.COM.