Open-to-buy
Open-to-buy (OTB) is a basic planning tool used in retail to manage inventory budgets. It helps stores decide how much new merchandise they can purchase while maintaining healthy stock levels. Think of it like a spending budget that takes into account what's already been bought, what's been sold, and what's still in stock. Merchandisers and buyers use OTB to make smart purchasing decisions and avoid having too much or too little inventory. This system is especially important in fashion retail, department stores, and other businesses where products change seasonally.
Examples in Resumes
Managed $2M Open-to-buy budget for women's accessories department
Developed and maintained Open-to-Buy plans for 12 retail locations
Increased efficiency of OTB process resulting in 15% inventory reduction
Created monthly Open To Buy reports for senior management decision-making
Typical job title: "Merchandise Planners"
Also try searching for:
Where to Find Merchandise Planners
Professional Networks
Job Boards
Example Interview Questions
Senior Level Questions
Q: How would you handle a situation where actual sales significantly deviate from the OTB plan?
Expected Answer: A senior planner should discuss adjusting future buying plans, reallocating budgets between departments, negotiating with vendors for returns or delayed shipments, and creating markdown strategies if needed.
Q: How do you align OTB planning with overall company strategy?
Expected Answer: Should explain how to balance financial goals with merchandise assortment, consider market trends, coordinate with marketing initiatives, and adjust plans based on company growth targets.
Mid Level Questions
Q: What factors do you consider when creating an OTB plan?
Expected Answer: Should mention sales history, seasonality, trends, markdowns, inventory turnover, and promotional calendar as key factors in planning.
Q: How do you calculate OTB and what reports do you use?
Expected Answer: Should explain basic OTB formula (Planned Sales + Planned EOM Stock - BOM Stock + Planned Markdowns = OTB) and mention common retail planning reports.
Junior Level Questions
Q: What is the purpose of Open-to-buy planning?
Expected Answer: Should explain that OTB helps control inventory levels, manage cash flow, and ensure the right amount of merchandise is available at the right time.
Q: What are the basic components of an OTB plan?
Expected Answer: Should identify beginning inventory, planned sales, planned markdowns, and desired ending inventory as key components.
Experience Level Indicators
Junior (0-2 years)
- Basic retail math calculations
- Understanding of inventory management
- Knowledge of Excel or planning software
- Basic report creation and analysis
Mid (2-5 years)
- Seasonal planning and forecasting
- Vendor management
- Markdown optimization
- Budget management
Senior (5+ years)
- Strategic planning
- Team leadership
- Multi-category management
- Advanced forecasting techniques
Red Flags to Watch For
- Unable to explain basic retail math
- No experience with retail planning software
- Lack of understanding of seasonal retail cycles
- Poor analytical skills or attention to detail
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