Inventory Control | Buying Plans | Open-to-Buy

How-To Info, Online Calculators for Retail Inventory Control and Open-to-Buy Planning

There is a cause-effect connection between sales, gross margins, and inventory turns.

Effectively managing that balancing act is part of the art of retailing.

Enjoy this free access to selections from The ROI's proprietary content. Ready for more? The Members-Only Collection includes even more for owners about inventory management and Open-to-Buy planning.

"Entry Exam" for New Items

Ahh, the appeal of new items. Or, the demands of your customer's ever-growing "wish list" items.

But, when you are also trying to control inventory, and keep turns up, the challenge is, "Really...which items should you buy?"

As many retailers are only too aware, if you are not vigilant, you may experience bloated inventories, which can cascade into cash flow problems very quickly.

Here are six key questions for you and your buyers to ask yourselves as you consider new items.

We think of it as an "entry exam" for merchandise.

Use them to quickly see, "Which items actually deserve to be in your store?"

New items? Of course. The customers always want what's new! But, too much of a good thing? Not any more!

Quick Quiz for New Items

Can my customers get this item at other stores in my market area?
YES? Careful; it probably has no pulling power.

Is this subject to a lot of price competition?
YES? Slow turners with weak margins are double trouble.

Does having this item in stock help me sell other higher-margin merchandise?
NO? If not, you may not need it.

Can I get faster delivery on this item than I am now getting?
YES? You may be able to cut back on your stock.

Do I order larger quantities of this item than I actually need in order to take advantage of price breaks?
YES? Caution advised. You may be coming out on the short end when you figure in all the costs of excess inventory.

Do I have an emotional attachment to this item that reflects my personal taste rather than a business-like response to my customer’s desires?
YES? Best to avoid it.

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

Smart Buying in the Covid Age

2020's unrelenting flexibility tests have been a challenge.

Economic uncertainty is compounded by cautious consumers. Yet retailers still must run their business. And that means they still must buy and sell merchandise.

How to do that successfully? It starts with making some savvy assumptions about expected sales.

Then, at The ROI, those sales assumptions can be turned into an inventory buying plan – in nanoseconds. All on your own.

A game plan, a path forward. Some semblance of clarity. What could be better? see more

"Samplers" from Topical Tuesdays Webinars | Inventory Management

Clips from popular TOPICAL TUESDAYS Webinars from the Co-Founders

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November 28, 2020

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From the Library for Owners | Inventory Management

Merchandise Planning: Back to the Basics

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.

"Okay, this sounds great. Except it's tedious, and time-consuming, isn't it?"

Alas, there is some truth to that. Which is exactly why The ROI has built our online Open-to-Buy "calculators." They do the tedious number-crunching for you!

See for yourself:

Look at the SPEEDY Buying Plan Forecaster. Use it to quickly get a buying plan for a single department, or your entire store.
Or, take advantage of The ROI's Multi-Department Open-to-Buy Calculator. Online, in-the-cloud; nothing to download or install. It just works – auto-magically!

Having those Big Picture parameters or guardrails – how much merchandise to bring in, and when – means you can focus on those things that demand your good judgment: what specifically to buy, from which vendor, at what terms.

☞ Members have unlimited access to each of these calculators, plus much more.

Go here to start your Member Access now! Manage your inventory like the pros do!

How to Shape Up Your Inventory? Manage Inventory Turns

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

This excess inventory is like excess fat:

It looks bad
Consumes energy the inventory “muscle” needs
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 Diamond of Doom

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.

Getting Through the Retail Maze with GMROI

(Gross Margin Return on Inventory Investment)

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."