Retailers love markdowns. Or it would appear to be so since they are always offering so many. Markdowns have become a way of life for most retailers and are accepted as part of the “game”. But should this be the case or is it the lazy way to solve the problem of overbuying even though it doesn’t solve the problem?
In terms of the math, when a markdown (say 50% off) is taken, you are effectively only taking in enough to pay your vendor for the merchandise – nothing for overhead and nothing for profit. Now you might be thinking that you can get by without profit on that item as long as you can pay your vendor and keep the flow of merchandise coming. But where will the money come to pay the overhead (rent, staff, advertising, insurance, utilities, etc) – those costs that insure you keep the doors open? If you’re thinking more markdowns, you’re working your way out of business.
While every retailer will make a few mistakes in their buying, the important mistake NOT to make is overbuying. And you will always overbuy when buying without an open to buy plan. Winging it is more fun, but the joy will only last until you are buried in excess invoices. Then the joy in retailing (which can be euphoric) will be gone and, sadly, is gone much too quickly for most retailers.
The time to get on board with open to buy planning is before you open your store, but for those reading this, you’re well beyond that time, so the time is NOW! Why struggle when the tool you need is so easily put to work to improve your buying, inventory position and cash flow? Why wait to make retailing a joy again and make your store profitable? Why?
There are many systems and services that will tell you what I have stated above and any open to buy is better than no open to buy. But if you’re ready to do the right thing for your store and your bottom line, why not start with the system that’s the easiest, the most accurate, the best supported, the one that is accessible from any device at any time, supported 10/7 at no additional charge, has no contract and is Guaranteed to give you the correct buying numbers to make your store a success.
That system is myotbplan.com. It can be working in your store in a few hours. Let’s talk!