Retailers love to buy. They know what their customers want and they never want to disappoint them. So they buy more… and more. But too much of a good thing is a bad thing! That’s not just a cute saying – it’s the truth.
Retailers consider buying an art. And to some degree it is. You are offered a vast variety of colors, patterns, fabrics, styles and more. It’s literally mind-boggling. So how do you know when enough is enough?
Retailer never want to miss a sale. To do that, you will need much more inventory than you can sell and you will not be able to pay your bills. You have to miss some sales to make money. Trying to satisfy everyone’s desires will keep your customers happy until they see your store is closed.
So, it’s a bit of a juggling act. You want to maximize your sales with the smallest possible inventory. That can only happen with a good open to buy plan. You can’t do it in your head because there are too many variables – and I’m only talking about the dollars, not the items. An open to buy plan, based on your anticipated sales and desired turn rates will develop a buying plan that will insure you have the right amount of merchandise in the right area at the right time. Once you have your dollar plan, you can start to find the best items to fill it.
Without open to buy, you will be guessing – and that never works. You will overbuy and be buried in excess invoices. Your open to buy system will tell you when to stop buying so you can start making money. And that’s why you’re doing this in the first place, right?