What is Overbuying in Retail? Explained

Overbuying in retail occurs when a business purchases more inventory than it can effectively sell or manage. This may result from factors such as inaccurate demand forecasting or an optimistic outlook on sales. Consequences of overbuying include excess inventory, storage issues, and the need for discounts to move surplus goods. Successful retail operations require precise inventory management and demand forecasting to prevent the challenges associated with overbuying, ensuring a balanced and profitable business model.