Maximizing Retail Profit with an Open-to-Buy Excel Spreadsheet

While high-end retail management systems exist, an remains a solid, accessible tool for many small to medium-sized businesses to gain control over their cash flow and inventory levels. What is Open-to-Buy (OTB)?

: The target stock level you want to have remaining to support the following month's sales.

In the fast-paced world of retail, inventory is your greatest asset—but it can also be your biggest liability if not managed correctly. An plan is a strategic roadmap that helps you determine exactly how much inventory to purchase during a specific period to meet sales targets without overstocking.

To build your spreadsheet, you need to understand the fundamental calculation. The standard retail formula for OTB (expressed in retail dollars) is:

: Anticipated discounts or promotions that will reduce the retail value of your inventory.

: Inventory that has been purchased but not yet received. 3 Reasons to Use an OTB Spreadsheet