Online sellers, need to stay on top of inventory control to ensure that they have the right amount of stocks in hand to meet the market demand. If you have too much inventory or the wrong kind of product, it can hold up your cash flows. It can also cause your profits to dip if there are too many item markdowns. On the flip side, if you under buy a product, which means you have too little of it, you miss out on opportunities to sell, your profits take a hit and your customers won’t be happy. This is where open to buy comes in handy.
Open to buy helps retailers in several ways -
It guides the retailer on how much inventory is required, considering the current inventory at hand, those in transit, and those of outstanding orders.
With OTB an e-commerce retailer can stock the right quantities of the right products at the right time, eventually leading to increased revenues and margins.
Retailers can avoid situations of overbuying, stock-outs, and missed sales.
Retailers have better financial control and can elevate customer satisfaction.
Retailers can check the effectiveness of the plan, set higher standards for performance, and take measures for improvement if needed.
