What is Open-To-Buy (OTB) in Retail? Explained

Open-To-Buy (OTB) represents the merchandise budget available for purchasing goods during a specific period. It reflects the difference between planned retail sales and current inventory levels, indicating the funds a retailer has for spending on new merchandise. OTB is a crucial tool in retail planning, aiding businesses in managing inventory levels, meeting customer demand, and optimizing sales. By closely monitoring OTB, retailers can make informed buying decisions, prevent overstock or stockouts, and ensure a balanced and profitable merchandise assortment. Effective OTB management is essential for maintaining a healthy inventory turnover rate and maximizing overall profitability.