Mastering Open-to-Buy: A Buyer's Playbook for Independent Retail

What Open-to-Buy Actually Is

Open-to-Buy (OTB) is the maximum amount of new inventory you can commit to in a given period without breaking your inventory plan. Done well, it forces every buying decision through a single question: **"Does this purchase fit my plan?"**

The Core Formula

> **OTB Retail = Planned Sales + Planned Markdowns + Planned EOM Inventory − BOM Inventory − On-Order Inventory**

Translation: take what you expect to sell, add what you''ll mark down and what you need to end with, then subtract what you already have and what''s already coming.

OTB Cost = OTB Retail × (1 − IMU%)

Building Your Plan in 5 Steps

1. Set planned sales by month Use last year as the base, apply your growth assumption (5% is the standard default), and adjust for known events.

2. Plan markdowns honestly If last year''s markdown rate was 12%, don''t plan 6% this year just because it looks better on paper.

3. Plan EOM inventory using stock-to-sales A 2.0× stock-to-sales ratio is a healthy starting point for most apparel categories. Adjust for your turn goals.

4. Layer in on-order Every PO with a delivery date inside your plan reduces your OTB. This is where most retailers lose discipline.

5. Review weekly OTB isn''t set-and-forget. Every week, your actuals shift the plan — update it.

The Discipline That Separates Pros from Amateurs

When a vendor shows up at market with a "must-have" line, the amateur buyer buys it because it''s cute. The pro buyer asks: *"Do I have open-to-buy in that month, in that category, for that vendor?"*

If the answer is no, the pro either says no — or trades it against another commitment.

Tools That Help

Modern POS systems (including Perfect POS) build OTB straight into the workflow: monthly plans, AI-suggested forecasts based on your actual sales history, and live OTB-remaining numbers as you write POs.

The math hasn''t changed in 50 years. The speed of getting to the answer has.