Open-to-buy formula: the merchant-planning playbook for independent boutiques.

Most independent boutiques buy by feel. The owner walks a trade show, sees three brands that excite them, places orders that feel proportional to last year's sales, and hopes the cash flow holds. Six months later the shop is full but the bank account is not, and nobody can quite explain why. Open-to-buy — OTB — is the planning tool that prevents this exact outcome. It is not new and it is not complicated. Department stores and chains have run OTB as standard merchant practice for forty years. Independent boutiques almost never have, because the formula was never taught outside of buying offices and the language sounds intimidating. It is not. This post strips OTB down to what an independent boutique owner actually needs: the formula, how to populate each line, a worked example through a real Vienna boutique's March plan, the five mistakes that wreck the math, and how to keep the plan honest mid-month as actual sales come in. nouz exists to make the daily revenue and COGS numbers flow straight into next month's OTB plan instead of being reconstructed from spreadsheets, but you can run the whole exercise on a single A4 sheet by Sunday evening.

TL;DR

What "open to buy" means in plain English

Open-to-buy is the answer to a single question: how much new inventory, at cost, am I allowed to order this month without ending the month with more stock than the shop can carry? It is a budget, expressed in euros at cost, refreshed every month. If the OTB calculation says €4,200 for March, that is the maximum cost-value of orders you can write that month. Place orders for €6,800 and you have over-bought by €2,600 — which means you will close March with €2,600 more inventory than the plan called for, the dead-stock clock starts ticking on whatever does not sell, and next month's OTB will have to shrink to absorb the overshoot.

The reason OTB matters specifically for independent boutiques is that the alternative — buying by feel — is structurally biased toward over-buying. Three forces push every owner toward more rather than less stock: suppliers offer minimum-order discounts that reward bigger commitments, the shop visually looks better with full racks, and the owner's optimism about each piece is highest at the moment of buying. OTB is the discipline that pushes back against all three. It does not tell you what to buy. It tells you the maximum you can afford to buy without breaking the cash and inventory math for the months that follow.

OTB is also not a strategic tool — it is a tactical one. It does not decide your buying philosophy, your brand mix, your point of view, or your aesthetic. Those are merchant decisions that happen upstream. OTB takes the merchant plan you already have and runs the arithmetic: given what you expect to sell, what you expect to mark down, and what you already have on the floor and on order, how much more can you buy? Strategy decides what; OTB decides how much.

The OTB formula

There are several equivalent ways to write the OTB formula. The one most useful for independent boutiques is the five-line version, because each line maps to a number you can actually populate from your records:

Each line means something concrete:

• Planned EOM inventory — the stock at cost you want on the floor at the end of the month, set by your target stock-to-sales ratio.
• Planned sales — the COGS portion of the sales you expect this month (planned retail sales × (1 − blended margin)).
• Planned markdowns — the cost value of stock you expect to write down or clear at reduced prices during the month.
• BOM inventory — Beginning-Of-Month stock at cost: what is on the floor right now, at supplier cost.
• Inventory on order — stock already committed to arrive during the month but not yet on the floor.

Mechanically: you start with what is already coming in (BOM inventory + inventory on order), you add what you need to leave the month with (planned EOM inventory) plus what will flow out as sales and markdowns (planned sales + planned markdowns), and the difference is the OTB — the additional buying capacity left in the month. If the math comes out negative, you are already over-committed and should not place a single new order until the shop sells through more of what it has.

The arithmetic is grade-school. The discipline is in populating each line with honest numbers rather than wishful ones.

Worked example — a Vienna boutique's March plan

Mira runs a 70 m² womenswear boutique in Vienna's 7th district. The shop is in its third year. Her last twelve months ran at €23,000/month average net revenue. She is planning March 2026 — early spring drop window, the first significant buying month of the new season. Here is how she runs the OTB plan for the whole shop (she will repeat the same exercise by category, below).

Step 1: Planned sales. Last March she did €21,400 of net revenue. She is targeting 8% growth (modest, in line with the previous twelve months' trend) and March carries a 1.05 seasonality factor for her shop (slightly above the monthly average because the spring drop pulls early bookings). So planned March net revenue = €21,400 × 1.08 × 1.05 = €24,267. Her blended gross margin runs at 52% after markdowns, so planned March COGS = €24,267 × (1 − 0.52) = €11,648.

Step 2: Planned EOM inventory. Her target stock-to-sales ratio is 5.0× for boutique apparel (mid-range of 4-6 for fashion). That means at end of March, she wants stock at cost equal to roughly 5× March COGS. Planned EOM inventory = €11,648 × 5 = €58,240. (She rounds to €58,000.)

Step 3: Planned markdowns. Historically about 18% of her March stock value moves at marked-down prices (winter clearance pieces still hanging around). The cost value of those markdown-cleared units is roughly 7% of average inventory. Planned markdowns at cost = €58,000 × 0.07 = €4,060. (She rounds to €4,000.)

Step 4: BOM inventory. Walking the floor on Feb 28: stock at cost on the racks = €48,500.

Step 5: Inventory on order. She already placed two orders in January for March delivery — a small denim drop arriving March 8 and a knitwear top-up arriving March 15. Total on order at cost = €6,800.

Putting it together:

Mira's OTB for March is roughly €18,300 at cost. That is the maximum value of new orders she can place during March without overshooting her planned EOM inventory. If she walks Premium Munich on March 6, sees four brands she loves, and writes orders totalling €23,500 at cost, she has just over-bought by €5,200 — which will compound into April either as forced markdowns or as stuck inventory choking April's OTB. The discipline is to walk the show with the €18,300 number written on the top of her notebook and stop when she hits it.

Two months in, after she repeats the exercise for April and May, the pattern will reveal itself. Boutiques that run OTB monthly catch over-buying before it becomes structural; boutiques that don't, only catch it at the year-end inventory count, by which point it is too late for the current season.

Why most boutique owners over-buy

Independent boutique owners almost universally over-buy. The reasons are structural, not personal failings, and OTB is designed to push back against each one. The two biggest patterns:

The seasonality trap

Buying happens months before selling. A boutique placing fall orders at a March trade show is committing cash that will leave the bank in July (when the goods ship) and will not generate sales revenue until August-November. The owner is looking at a sample rail in March and trying to predict how that piece will sell five to seven months later, in different weather, with a different macro mood, against a different competitor set. Optimism in that moment is structurally higher than reality nine months later, when the markdowns start.

OTB pushes back by forcing the owner to convert excitement about a brand into a euro budget. "I love this collection" becomes "I have €4,800 left in OTB for outerwear this month, and this collection's minimum order is €6,200, so either I'm cutting something else or I'm walking away." The decision is no longer about the collection in isolation — it is about the collection against the budget.

The supplier-relationship trap

Suppliers and sales reps are doing their job — which is to grow your order, not to keep your inventory healthy. The standard tactics: minimum-order thresholds that reward bigger commitments, tier-discount structures ("order €5,000 and the discount goes from 5% to 8%"), bundled add-ons ("take the new colourway and we'll throw in extra display materials"), and exclusive-territory pitches ("if you commit to €8,000 we'll make sure no other shop in your district carries us"). All of these push the owner toward a number higher than the OTB allows.

The math nearly always favours staying inside OTB even at a higher unit cost. A 3% discount on an order €2,400 above OTB saves €72 on unit costs but leaves €2,400 of additional inventory that, if it does not turn within 90 days, will be marked down 40% — losing €960 of margin. The €72 "saved" is dwarfed by the €960 lost. Independent boutiques almost never run this math at the point of decision, which is exactly why the supplier discount structure works for the supplier and against the buyer.

There are also two smaller traps worth naming. The visual-trap: a half-empty rail makes the shop look less successful, so owners over-order to keep the rails dense, when the right move is fewer pieces displayed more deliberately. And the relationship-trap: "I have to keep ordering from them or they'll drop me as a stockist next season." If a brand requires you to over-buy to keep the relationship, the relationship is the wrong shape — you are subsidising the brand's distribution, not the other way around.

Computing planned sales

Planned sales is the most consequential single input to the OTB calculation because every other line scales with it. Get it wrong by 15% on the high side and your OTB will be inflated by 15%, which means you will over-buy by 15%, which means the leak compounds. Get it wrong by 15% on the low side and your shop will run thin on stock and lose sales you could have captured. Both directions are expensive — the goal is honest, not optimistic.

The cleanest method for an independent boutique is a three-input formula:

Last year same month. Net revenue (after VAT) for the same calendar month last year. If you opened less than a year ago, use the same month from this year's trailing window or — if you have no history at all — use the most recent three-month average. The point is to anchor on real data rather than aspiration.

Growth rate. Your honest year-over-year growth trend, looking at the last six months versus the prior-year same six months. If you grew 7% on average last six months, apply 7%. Do not apply 25% growth because you redesigned the website. Growth rates above 15% require evidence; rates above 25% require very strong evidence; rates above 40% are almost always wishful thinking in independent retail.

Seasonality factor. The ratio of that specific month's revenue to your monthly average across the year. If March historically does €21,400 and your average is €20,400, your March seasonality factor is 1.05. If December does €38,000 against the same €20,400 average, December's factor is 1.86. Use trailing 12 months to compute these factors — they are surprisingly stable year to year for a given shop.

Worked example: Mira's January did €17,800 last year, against a €21,000 monthly average — seasonality factor 0.85. Her growth trend is 8%. Planned January net revenue = €17,800 × 1.08 × (already baked into the year over year comparison? — careful here).

Mira's actual math for March: last-March anchor €21,400 × 1.08 growth = €23,112. (No seasonality multiplier because last March already had March seasonality in it.) She rounded conservatively to €24,000 to reflect a slightly stronger early-spring drop window she has scheduled for this year. Either approach is defensible; what is not defensible is multiplying both by growth AND by a fresh seasonality factor, which would have given her €24,267 and would have been a 5% overshoot baked in.

Convert planned net sales to planned sales at cost using your blended gross margin: Planned sales at cost = Planned net revenue × (1 − blended margin %). For a 52%-margin shop, €23,112 of net revenue = €11,094 of sales at cost. That is the figure that goes into the OTB formula.

Computing planned EOM inventory

Planned EOM inventory — what you want on the floor at the end of the month at cost — is set by a single ratio: stock-to-sales. The ratio expresses how many months of inventory you want carrying compared to the monthly sales it will support. A 5× stock-to-sales ratio means you carry five months' worth of sales at cost on the floor. A 3× ratio means three months. The choice of ratio depends on your category and your buying rhythm.

Healthy stock-to-sales bands by category:

Use the band, not the top or bottom of it. Owners who set planned EOM at the top end of the band (carrying 6× for fashion) almost always over-buy. Owners who set it at the bottom (carrying 4×) sometimes run thin on bestsellers. The middle of the band is the right starting point for the first OTB plan, then tune up or down by 0.25× per quarter based on actual turnover results.

The formula: Planned EOM inventory = Planned sales at cost × stock-to-sales ratio. For Mira's March: €11,094 × 5 = €55,470, which she rounded to €55,500 (slightly lower than the €58,000 in her initial pass after she corrected the double-counting of growth and seasonality).

Computing planned markdowns

Planned markdowns is the line most independent boutiques skip or underestimate. The instinct is: "I don't plan to mark down — I plan to sell at full price." The reality, year after year, is that 15-25% of seasonal stock will not sell at full price and will move at some level of discount. Pretending otherwise in the OTB plan means the plan underestimates how much stock will need to flow out of inventory, which means it overestimates the OTB and leads to over-buying.

The planned-markdown line in OTB captures the cost value of stock you expect to clear at reduced prices during the month. Two methods to estimate it:

Method 1: historical sell-through

Look at the same calendar month last year. What percentage of that month's inventory went out at marked-down prices? For Mira's March last year, about 18% of stock cleared at some level of discount. The cost value of those discounted units was roughly 7% of average inventory at cost (because the cost was lower than the discounted retail). She uses 7% × planned EOM inventory as the planned markdown line.

Method 2: season-specific markdown calendar

If you run a structured markdown ladder (10-15% at 30 days, 25-30% at 60 days, 40-50% at 90 days), you can estimate markdowns by counting how many SKUs from previous seasons will hit each ladder rung during the month. This is more precise but requires you to actually run the ladder — which the boutique inventory turnover playbook covers in detail. Most boutiques find method 1 sufficient for OTB purposes, with method 2 reserved for the in-season adjustments.

Planned markdowns ranges by month and by shop. Spring shoulder months (March, April, September) tend to have higher markdown lines because they sit at the end of winter or summer seasons. Mid-season months (June, November) tend lower because most of the month's sales are at full price. December is typically the lowest markdown month of the year because the Christmas customer is less price-sensitive and the gift premium absorbs slow movers.

The by-category OTB plan

Running OTB at the whole-shop level is better than not running it at all. Running it by category is dramatically better. The reason: whole-shop OTB tells you the total budget, but it does not tell you whether you should be putting that budget into denim, knitwear, or accessories. A shop with healthy whole-shop OTB can still be structurally over-bought in one category and under-bought in another — the totals net out and the leak hides.

The exercise: break your inventory into 4-8 sub-categories that map to how you actually buy. For a fashion boutique those might be: denim, knitwear, tops/blouses, dresses, outerwear, accessories, footwear. For a home goods shop: ceramics, textiles, candles/fragrance, small electronics, paper goods, kitchenware. The categories should be small enough that each one has its own buying decision but large enough that you have honest sell-through data for each.

Then run the full OTB formula for each category separately. Mira's March, by category:

The whole-shop OTB is €15,700 (close to her earlier €18,300 figure once she corrected the double-counted seasonality). But the by-category view reveals two structural issues the whole-shop number hid: denim is slightly over-bought (negative OTB of €300, mostly absorbable), and outerwear is significantly over-bought (negative OTB of €1,000 — she has more outerwear than the shop will sell or mark down in March). Meanwhile tops/blouses and dresses have substantial OTB headroom (€7,100 and €6,600), which means the spring drop money should flow heavily into those two categories and not at all into outerwear.

Without the by-category breakdown, Mira walks the Munich trade show with €15,700 of OTB and risks writing orders that include another €2,000 of outerwear because "I love this brand" — pushing outerwear from −€1,000 to −€3,000 of over-buy while leaving tops/blouses still under-stocked. The category-level discipline is what makes OTB into a tool that actually changes buying decisions rather than a number on a sheet.

Mid-month adjustments

OTB is set at the start of the month, but it is not frozen. Mid-month sales velocity will diverge from the plan — sometimes by a little, sometimes by a lot — and the OTB number needs to flex with reality. The mid-month re-calculation is what separates boutiques that use OTB as a buying compass from boutiques that use it as a once-a-month formality.

The mechanic: at the end of week 2 of the month, redo the OTB calculation with two updates. Update 1: replace planned sales for the rest of the month with a revised estimate based on actual week-1 and week-2 velocity. If you planned €11,000 of sales at cost for the month and you have done €4,200 in two weeks, you are on pace for €8,400 — revise the planned figure to €8,400 (or a blend of the original plan and the actual run-rate, weighted 60/40 toward actual). Update 2: update BOM to actual mid-month inventory at cost and revise inventory on order to reflect any orders that have arrived or been delayed.

Worked example: by March 15, Mira has done €4,100 in actual sales at cost (against a planned €11,000 for the full month — running about 25% below pace). She updates the plan with a revised €9,200 planned full-month sales. Her BOM-equivalent at March 15 is €47,800 (she received the €2,800 denim order on March 8 and sold through about €4,100). She refreshes the full OTB:

• Revised remaining-month sales at cost: €9,200 − €4,100 already sold = €5,100 still to come.
• Planned EOM inventory: unchanged at €55,200.
• Planned remaining markdowns: roughly half the original €4,200 = €2,100.
• BOM (mid-month): €47,800.
• Inventory still on order: €3,800 (the knitwear top-up arriving March 15).
• Revised remaining OTB: €55,200 + €5,100 + €2,100 − €47,800 − €3,800 = €10,800.

The revised number tells Mira she still has €10,800 of OTB headroom for the second half of March, down from the €15,700 she started with. The shrinkage is because actual velocity was below plan, which means more stock will carry into April than expected, which means less new buying is needed in March. This is the OTB working correctly — adjusting buying capacity to actual sales reality, in real time.

Without the mid-month refresh, Mira would keep buying against the original €15,700 figure and would close March with €5,000 more inventory than the plan called for. With the refresh, she stops the over-buy before it happens. The mid-month adjustment is the single highest-leverage discipline in monthly OTB practice.

Five common OTB mistakes

Once you start running OTB monthly, five mistakes will try to creep into the math. Each one quietly inflates the OTB number and leads to over-buying. Catch them at the source:

1. Using retail values instead of cost values

Every input to the OTB formula must be at cost — supplier cost, not selling price. Mixing the two will overstate OTB by your gross margin percentage (typically 50-60%). The most common mistake: using the retail value of planned sales (€24,000) instead of the cost value (€11,500), which would inflate March OTB by €12,500 and lead to massive over-buying. Always tag your numbers "at cost" before you start the math.

2. Using initial markup margin instead of blended margin

Planned sales at cost depends on blended gross margin — the margin you actually realise after markdowns, write-offs, and supplier price creep — not the initial markup margin on a piece sold at full price. A boutique with 60% initial markup and a real blended margin of 48% who uses 60% in the OTB math underestimates planned sales at cost by 24%, which inflates OTB. Run the blended margin from your trailing 12 months, not from your price tags.

3. Double-counting seasonality and growth

Covered above — if you anchor on last year same month, you have already baked in seasonality, so multiply by growth only. Multiplying both gives you a 5-15% overshoot on planned sales, which propagates into OTB.

4. Forgetting inventory on order

The most common single error in first-time OTB plans is leaving out the "inventory on order" line entirely or under-counting it. Pre-committed orders that have not yet arrived still count against your OTB — they are stock that will land in the month, so they reduce the headroom for new orders. Owners who forget this line over-buy by exactly the value of the omitted commitments. Keep a running list of placed-but-not-yet-arrived orders, updated weekly, accessible at OTB calculation time.

5. Running OTB only at the whole-shop level

Whole-shop OTB is necessary but not sufficient. Without the by-category breakdown, you cannot see when one category is over-bought and another is under-bought — the totals net out and the structural imbalance hides. Always run OTB at category level for any boutique with more than three to four sub-categories. The extra work is 30 minutes; the protection against compounding over-buying in a single category is months of margin.

Pre-season planning vs in-season reactivity

OTB has two distinct rhythms — pre-season planning and in-season reactivity — and confusing them is a source of error. Pre-season is the broad-strokes plan made before the season starts (typically 3-6 months ahead); in-season is the monthly OTB execution that responds to what actually sells. The two work together but answer different questions.

Pre-season OTB sets the seasonal budget envelope. Before the spring season starts, Mira lays out an OTB plan for March-April-May-June at category level, using last year's sell-through, her growth rate, and her seasonality factors. She uses this plan to commit her major orders at the January and February trade shows — confidently, knowing the math allows it. Pre-season is necessarily approximate because she cannot know yet how well the season will sell — it is a planning anchor, not a real-time tool.

In-season OTB is the monthly refresh that responds to what actually happened. Each month, she pulls the actual sales, actual markdowns, actual BOM, and actual on-order from the previous month's close and recalculates the current month's OTB. If the season is selling stronger than planned, OTB expands and she has room for top-up buys. If softer than planned, OTB contracts and she pulls back on new orders. The pre-season plan gets revised against reality, not religiously followed.

The interaction matters because pre-season commitments — orders placed in January for delivery in April — are largely locked in. They contribute to the "inventory on order" line in April's OTB calculation regardless of whether April's sales are tracking to plan. If the season is soft, the in-season OTB will compress hard because the pre-committed pipeline is fixed and the only flex available is in new buys. Owners who pre-commit too aggressively in good seasons find themselves with negative OTB across multiple categories in soft seasons and very limited ability to react.

The supplier-payment-terms angle

OTB is conventionally calculated against inventory at cost — the goods value, not the cash value. But cash flow is the actual constraint for most independent boutiques, and the relationship between OTB and cash depends critically on your supplier payment terms. The same €15,000 of OTB places dramatically different stress on your bank account depending on whether you pay NET 0 (cash on delivery), NET 30 (invoice paid 30 days after delivery), or NET 60 (invoice paid 60 days after delivery).

Worked through Mira's March:

The structural point: longer payment terms effectively let the inventory pay for itself before the supplier invoice falls due. A piece bought NET 60 that sells in week 4 has generated its own cash by week 4 — the supplier invoice (week 8) is paid out of revenue the piece itself generated. The same piece bought NET 0 requires the boutique to fund the cost upfront from working capital, which is a real and limited resource.

Two operational implications for OTB practice. First: when comparing two suppliers offering similar product at similar cost, payment terms are part of the deal — a NET 30 supplier is meaningfully better than a NET 0 supplier even at the same unit cost. Push for terms with every supplier you buy more than €3,000/year from; most will move to NET 30 after the first season's history. Second: if you are running tight on working capital, prioritise placing OTB-eligible orders with your longest-terms suppliers first, and only after that commit to short-terms suppliers.

Some boutique owners maintain a parallel "cash-OTB" alongside the goods-OTB — a budget for how much cash leaves the bank in each month after applying payment terms. This is overkill for most independent shops, but for boutiques with very tight cash flow it converts the goods-OTB into a more accurate operating constraint. The simpler version: when placing an order, note the expected payment date alongside the order value, and keep a rolling 60-day calendar of upcoming supplier outflows. That alone catches most cash-flow surprises.

How nouz makes OTB easier

OTB is a monthly discipline. The bottleneck for most independent boutiques is not the formula — it is having the input numbers ready when the OTB calculation needs them. Specifically: last month's actual sales at cost, this month's BOM inventory at cost, and a clean blended margin from the last 12 months. Without those three, the OTB number drifts from honest to approximate to fictional, in that order, across the season.

nouz solves the input-readiness problem by capturing the right data at the right cadence. Every product sale logged in the daily P&L carries a COGS snapshot — the cost of that unit at the moment of sale, frozen against future product edits. Sum monthly COGS from those snapshots and you have planned-sales-at-cost grounded in real history rather than estimated from revenue × margin. Capture your BOM inventory at cost on the first of each month (a single number, entered once) and the OTB formula has its last input. Blended margin computes itself from twelve months of daily revenue and COGS data.

The wider point: visibility of yesterday's number tomorrow is too slow for OTB. The mid-month adjustment requires daily numbers, the by-category breakdown requires per-product COGS, and the pre-season plan requires a clean trailing 12-month blended margin. Owners running on monthly accountant reconciliation simply do not have these inputs at OTB calculation time, which is why OTB stops being practical for most independent boutiques after the first attempt. Same-day P&L closes the gap — every input that OTB needs is computed by close of business each evening, sliceable by month, category, or product line at the moment the buying decision needs it.

What to do this week

OTB does not have to be perfect on the first attempt. The first month's plan will be approximate; the second will be tighter; by the third month you will have caught at least two over-buying mistakes you would have made by feel. Start this Sunday.

1. 01
   1. Walk the floor and count BOM inventory at cost.

   For every category in the shop, sum the cost value of stock on the racks. If you cannot answer "what is on the floor right now at cost?" within €500, no other OTB number will be trustworthy. This is the first 90 minutes of the exercise and it pays back for every month afterward.

2. 02
   2. Pull last 12 months of net revenue by month.

   Bank-deposit data, net of VAT. From this, compute the same-month-last-year anchor for next month, your year-over-year growth trend, and your blended monthly seasonality factor. Twenty minutes of arithmetic.

3. 03
   3. Compute your honest blended gross margin.

   Trailing 12-month net revenue minus trailing 12-month COGS, divided by net revenue. Not your initial markup — the real number after markdowns and write-offs. Most boutiques discover this is 8-12 points below what they were quoting.

4. 04
   4. Set your stock-to-sales ratio.

   Pick the middle of the band for your category (5× for boutique fashion, 3× for basics, 4× for home goods). You can tune later based on results.

5. 05
   5. Estimate planned markdowns from last year same month.

   What percentage of inventory cost cleared at marked-down prices in the same month last year? Use that, or 5-7% of EOM inventory as a starting placeholder if you have no history.

6. 06
   6. List inventory on order.

   Every supplier order placed but not yet arrived, summed at cost. This is the input owners most often miss — keep a running list updated weekly.

7. 07
   7. Run the OTB formula for next month, by category.

   Planned EOM + planned sales + planned markdowns − BOM − on order = OTB. Categories with negative OTB are off-limits for new orders this month. Categories with substantial positive OTB are where the next supplier conversations focus.

8. 08
   8. Set a calendar reminder for mid-month refresh.

   Day 15 of the month, redo the OTB calculation with actual sales-to-date. Adjust the remaining-month buying budget accordingly. This single discipline catches more over-buying than any other.

Run the cycle for three consecutive months and the patterns will reveal themselves. Categories that consistently show positive OTB are growth opportunities; categories that consistently show negative OTB are over-bought and need markdown discipline before any new orders. The buying decisions get measurably easier because the budget is on paper rather than in your head.

For the wider operating system this fits inside, see the retail profitability pillar. For the inventory-velocity lens on the same problem — the metric that decides whether your shop survives the year — see the boutique inventory turnover playbook. For pricing math that sets margin up to support the OTB plan, see the retail markup formula. For spotting and fixing the dead stock the OTB plan is designed to prevent, see the dead-stock spot-and-fix playbook. For the six-step margin diagnostic that catches what OTB cannot, see my retail store is losing money. For the restock-timing companion to OTB, see the retail margin curve and restock timing. Glossary references: inventory turnover ratio, GMROI, days sales of inventory, sell-through rate. Calculators: inventory turnover, GMROI, retail sell-through rate.

Open-to-buy is the cheapest piece of merchant discipline available to an independent boutique. The owners who run it monthly almost never over-buy in a way that threatens the shop. The owners who don't almost always do, and almost always cannot tell you within €5,000 how much. The arithmetic is simple. The monthly cadence is the whole game.

FAQ