Chase Buying in Fashion Retail
Open-to-buy (OTB) is a term used in retail and inventory management to refer to the amount of money available to purchase new merchandise during a specific time period, typically a season or a month.
Leaving OTB money available for chase buys is crucial for several reasons. Here are some key points highlighting the importance:
Capital Allocation: By reserving a portion of your budget for chase buys, you're effectively allocating capital to respond to unforeseen opportunities or shifts in demand. This allows you to be agile in your purchasing decisions and take advantage of emerging trends or sudden spikes in customer interest.
Adaptability to Trends: Consumer preferences and market trends can change rapidly. Having available open-to-buy money ensures you can quickly adapt to these changes.
Optimizing Inventory Levels: It's important to strike a balance between overstocking and understocking. Too much inventory ties up capital and may lead to markdowns, while too little inventory can result in lost sales. OTB money allows you to adjust your inventory levels as needed, optimizing your stock levels.
DO IT! Leaving open-to-buy money available for chase buys is a strategic move that allows retailers to be more responsive, adaptable, and profitable in a dynamic market environment. It provides the flexibility needed to capitalize on opportunities and mitigate risks associated with inventory management.
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