The buzzword of Open-To-Buy occupies every merchandiser’s mind to save on dollars. Open-To-Buy not only helps maximize sales dollars but also minimizes cost dollars. It is an essential tool for Retailers to improve their financial performance. Small Retailers struggle to make their merchandise budget and often buy based on surmise. Big Retailers struggle with bulky worksheets as Retail ERP software does not offer the Open-To-Buy concept as part of their core modules. Some software provides it as an add-on module with poor integration.

What is Open-To-Buy?

Open-To-Buy is a concept to bring more transparency into the retail business. It is a tool that addresses the most critical question of how much to replenish and when to replenish stocks as they deplete. Retailer’s significant investment goes into their inventory buys, and Open-To-Buy addresses how much to buy. It is always future-oriented and adjusts the plan based on past trends and the vendor’s history of supplies. It is derived based on sales budgets to procurement budgets to actual sales in dollar terms. Often, an Open-To-Buy is combined with an assortment plan to answer both questions of how much to buy and which items to buy in each inventory category. Open-To-Buy is not used for daily basics or essentials as they go by standard replenishment at re-order levels.