Open To Buy Definition Here

Ensures key products are available when customers want them.

For a deeper dive into retail planning, resources like the Shopify Retail Blog and Board's Glossary offer detailed guides and formulas for different business sizes. AI responses may include mistakes. Learn more open to buy definition

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. Ensures key products are available when customers want them

Prevents over-committing capital by buying too much stock. open to buy definition

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

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