Open To Buy Definition • Instant & Deluxe

Plans can be broken down by entire store, specific seasons, departments, or even individual vendors. The Core Formula

The target stock level for the end of the period. Why Retailers Use It open to buy definition

While specific variations exist, the fundamental logic behind OTB is: Plans can be broken down by entire store,

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 It acts as a guardrail to ensure businesses

Prevents over-committing capital by buying too much stock.

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

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.