Open To Buy Definition May 2026

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.

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 open to buy definition

While specific variations exist, the fundamental logic behind OTB is: Retailers use data rather than "gut instinct" to

Plans can be broken down by entire store, specific seasons, departments, or even individual vendors. The Core Formula Projected Markdowns: Discounts expected during the period

Prevents over-committing capital by buying too much stock.

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

Ensures key products are available when customers want them.