Open To Buy Definition Today

Helps identify slow-moving inventory, allowing for faster stock rotation.

While specific variations exist, the fundamental logic behind OTB is: open to buy definition

Plans can be broken down by entire store, specific seasons, departments, or even individual vendors. The Core Formula is a financial budget and retail planning process

Prevents over-committing capital by buying too much stock. Why Retailers Use It Retailers use data rather

is a financial budget and retail planning process that calculates the amount of merchandise a retailer can purchase within a specific timeframe. It acts as a guardrail to ensure businesses remain within their financial goals while maintaining enough stock to meet customer demand. Key Components of OTB

The target stock level for the end of the period. Why Retailers Use It

Retailers use data rather than "gut instinct" to manage their inventory levels. An OTB plan typically factors in: The projected revenue for the period. Current Inventory: The physical stock already on hand. Projected Markdowns: Discounts expected during the period.