Open To Buy Definition 【2025-2027】

Ensures key products are available when customers want them.

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. open to buy definition

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 Ensures key products are available when customers want them

While specific variations exist, the fundamental logic behind OTB is: Current Inventory: The physical stock already on hand

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

Prevents over-committing capital by buying too much stock.

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