Open To Buy Definition Today

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.

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 open to buy definition

The target stock level for the end of the period. Why Retailers Use It Retailers use data rather than "gut instinct" to

What is Open-to-Buy (OTB)? Definition, Meaning & Examples - Board Projected Markdowns: Discounts expected during the period

Prevents over-committing capital by buying too much stock.

While specific variations exist, the fundamental logic behind OTB is: