Do you know what turnover is? How to calculate it? What it means to your buying? What it means to your bottom line? Do you know how to use it? Do you know your current turnover in your store? In each merchandise department?
Most retailers concentrate on sales and space. When they buy, they buy to fill space and hope their sales will materialize. Of course, sales are important, but sales are only half the story.
Every store is driven by two elements – sales and turnover. An open to buy system is driven by the same two elements. Space is not a consideration. Buying needs to support anticipated sales and turnover will determine your inventory needs.
The advantage of retail over other types of investments (and, yes, your store is very much an investment) is your ability to control your turnover. This can only be done with open to buy planning which uses sales and turnover to determine ideal beginning inventories and then calculates a buying plan based on those values. The idea is to turn your dollars invested in inventory as quickly as possible. If you keep a smaller inventory and turn it faster, each of those invested dollars will make multiple contributions to overhead and profit. So, the more you turn, the more you make.
Retailing is a constant juggling act. You are trying to maximize sales at the highest possible turn rates. If your turn is too high, sales will be missed. If your turn is too low, merchandise sits and must be sold after the season at reduced prices.
So, turnover is the key to retail profits and open to buy is the only way to control turnover. The easy, accurate, guaranteed open to buy plan is myotbplan.com. Supported 10 hours every day, the program is not only affordable but there’s no contract and no risk. You can begin raising your turnover and your profits today with myotbplan.com.
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