How to Do Retail Inventory Buying (Open-to-Buy) Plans

Sound merchandise management is crucial for the survival and prosperity of your retail business. 

It’s not just another “paper exercise”—it can mean the difference between strong, positive cash flow or a constant battle to pay your bills. 

It can keep your operation profitable even in times of less-than-robust sales.

 

Inventory Turnover Rate: "Cruise Control" for Your Inventory Levels

If your store is like many other independent retailers, it’s probably overstocked much of the time. 

This excess inventory is like excess fat: 

1. It looks bad
2. Consumes energy the inventory “muscle” needs
3. Threatens the financial health of your business.

If you’d like to time your inventory flow so you always have fresh merchandise and a healthy turnover rate, consider this shape-up plan. 

It will help trim away excess inventory without cutting into the muscle of your stock.

 

 

The High Costs of Excess Inventory

As a retail owner, one of your primary goals is to boost profit margins—right? 

You know that good inventory management is essential to producing top-notch profits. 

You also know that bad inventory management can cause big problems with profit. 

However, you may not know the actual cause-and-effect of bad inventory management. 

 

How to Cut Inventory – Fast!

Is excess inventory threatening your store's survival? 

Here are 10 tips to turn your inventory into cash – quickly!

Sometimes retailing doesn’t quite turn out as you had planned. 

Did last year fail to live up to what you predicted—and budgeted for? 

Did you overestimate the popularity of your generous order of a particular product?  

Are there areas of your inventory brimming with overstock? 

Relax! There is a way out of this mess!

If you find yourself long on inventory and short on profits—whether from overbuying, expanding lines too quickly, or overestimating sales, don’t panic. 

You still can whip your inventory back into shape before it devours your profits.

 

GMROI: The #1 Measure of Inventory Productivity

One of the best tools for measuring and managing the productivity of your inventory investment is GMROI - Gross Margin Return on Inventory Investment. 

It's fast and easy to calculate. 

It is dynamic (some call it the "earn 'n turn" measure.)

Best of all, it provides powerful insights specifically for retailers.

That's why The ROI calls GMROI "the #1 measure of inventory productivity."

 

What's your inventory's SALES Potential?
Given your annual sales plan, do you have enough inventory? 

Or...too much?

Most retailers know their average inventory over the year. But the question is this: What are the likely sales from that much inventory? 

Here's how to find out. Use our Index of Sales Potential calculator. See what sales volume other retailers achieve.   Find out now 

Multi-Department Open-to-Buy Planner

By month. By department. By you! Get multi-department buying plans for yourself...in minutes. more

SPEEDY Buying Plan Forecaster

SPEEDY online inventory buying plans – auto-magically!  more 

GMROI Calculator

Project and compare your inventory productivity...before you place the order!  more

Most retailers have heard of the inventory managing tool "Open-to-Buy." 

But too often, it has been shrouded in mystery. Too complex and/or too expensive. Up until now!

In the Projecting Inventory Buys (Basics of Open-to-Buy) eLearning Kit, you will learn:

• How to control inventory by managing Sales, Margins, Turns, and On-Order
• How and why to do an inventory buying plan
• The four-part formula for inventory buying (also known as "Open-to-Buy")
• What turnover is, and how to set turnover targets
• How retail sales seasonality affects inventory buying
• How to use the BUYING PLAN Forecaster (included, no additional charge) to "automate" your Open-to-Buy planning

more info

ROI Members have unlimited access

The Retail Owners Institute regards GMROI - Gross Margin Return on Inventory Investment - as the #1 measure of inventory productivity.

Now, The ROI makes it easier than ever for you to put this tool to work in your retail operation.

• the formula for calculating GMROI
• how and why to use GMROI
• how to use The ROI's GMROI Calculator
• how to project GMROI for your operation
• how to use GMROI to improve the productivity of your inventory.

more info

ROI Members have unlimited access

See Webinars by Co-Founders for more information

Save time! Know It NOW! bundle for busy retailers

We get it. There is a lot of how-to information here at The Institute. 

And sometimes, you just "Need to Know it NOW!"

So, we've put together some "Know It NOW!" Bundles. Go here to see the BUYER'S Bundle

Watch • Listen • Practice • Do-It-Yourself • Know It NOW! 

The Retail Owners Institute^® has been empowering retailers since 1999 to "Turn on their financial headlights!"
Our tools and resources are trusted by thousands of store owners to help grow profitable, resilient businesses.