3 Ways Your OTB Planning Protects Your Profit
Open To Buy (OTB) planning protects your profit by establishing a safety margin of budgeted resources for the replenishment of your inventory. But the way you plan your OTB margin is really dependent on the retail business you are managing. Some products are pretty consistent all year long and others are strictly seasonal. Some retailers are very trend-driven and need considerably more leeway so they can have enough inventory for a fad without overbuying what will be out of fashion soon.
- OTB gives you a concrete plan of action with defined goals for later evaluation but allows the flexibility to take advantage of unanticipated events.
- OTB allows you to maintain appropriate levels of inventory while constantly refreshing your stock and anticipating planned promotions.
- OTB prevents the pendulum effect in purchasing, overbuying in reaction to stock depletion, or impulse bulk purchases.
The thing about OTB planning, though, is that it has to be based on the facts from your own business in order to be effective. This is where ChainDrive’s integrated retail management solution gives you the advantage you need for accuracy. You can look at all your data across your enterprise and analyze it in a lot of ways, allocating top-down or bottom-up and visualizing your plans via graphs and other performance indicators. Crunch your real numbers the way you need to in order to plan your OTB with the most effectiveness, then continue to evaluate your plan with real numbers in the future.
ChainDrive’s professional support services will help you incorporate our Open To Buy software along with the rest of our integrated retail management system. We specialize in customizing, too, so you know you will get the exact tools your business needs to be successful with ChainDrive.