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
The target stock level for the end of the period. Why Retailers Use It open to buy definition
is a financial budget and retail planning process that calculates the amount of merchandise a retailer can purchase within a specific timeframe. It acts as a guardrail to ensure businesses remain within their financial goals while maintaining enough stock to meet customer demand. Key Components of OTB For a deeper dive into retail planning, resources
What is Open-to-Buy (OTB)? Definition, Meaning & Examples - Board Why Retailers Use It is a financial budget
Prevents over-committing capital by buying too much stock.
While specific variations exist, the fundamental logic behind OTB is:
Plans can be broken down by entire store, specific seasons, departments, or even individual vendors. The Core Formula