Perfect Condition Inaccurate Planning What is Open-to-Buy?

Presenters: Brad Pinneke and
Paul Erickson
Open to Buy
Major Topics To Be Covered In This Presentation
• Perfect Condition
• Inaccurate Planning
• What is Open-to-Buy?
• Forecasting and Planning
• Benefits of Open-to-Buy
Open to Buy
Perfect Condition
Perfect Condition
• This Month’s Sales Forecast is 12 Pens
• How Many Do We Need?
• What If They Come in 12 Colors?
• How Many Do We Need Now?
• What If They Come in 2 Lengths?
Open to Buy
Open to Buy
Open to Buy
Definition: A Financial Budget for Retail Merchandise
• First Step to Better Control of Inventory
• Provides Guidance on How Much to Buy
• Creates Benchmarks on Evaluating Progress
• Financial Tool
• Units of Measure = Dollars
• Works at Any Level
Open to Buy
Retailers that Benefit Most from Open-to-Buy
• Apparel, Shoe, Outdoor, Gift, Jewelry, Toy, Sporting
Goods, Bike, and more
• Any Retailer that Carries Perishable and/or Seasonal
• Any Retailer that Must Commit $ to Inventory in
Advance of the Season
Open to Buy
Open to Buy Ingredients
• At Store Classification Level
• Sales
• Inventory Levels
• Receipts
• Markdown Budget
A Dynamic Profit Plan
Open to Buy
Forecasting and
Forecasting and Planning – At Classification Level
• Analyzes and Modifies Store / Classification Sales
Patterns and Markdown Data 6-12 Months in Future
• Builds Ideal Merchandising Patterns
• Identifies Profitable Trends by Classification
• Forecasts Ideal Inventory Levels
• Automatically Corrects for Timing of Receipts and
Out-of-Stock Inventory
• Recommends Open-to-Buy Based on Current Trends
Open to Buy
Open to Buy Benefits
• Faster Turnover = Less Money Tied Up in Inventory
• Higher Profit Margins = Reduced Cost of Goods Sold
• Increased Return on Inventory Investment = Increased
Inventory Productivity
• Maximize Sales = Constantly Looking for Opportunity
and Potential
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