Many of you may be scheduling your January buying trips now and making sure you are booked into the right hotels and are taking the right staff along. However, the most important thing you need on your trip is what most retailers forget about; their Open-to-Buy and Buy plan.
The Open-to-Buy and Buying plan are integrally related. The basis for your Open-to-Buy should be your last year's performance and your plan for growth, margin improvement, improved stock turns and/or inventory reduction. These factors will all help determine how much and when you should be buying.
The Buy Plan takes the Open-To-Buy a step further. In the Buy Plan you need to incorporate how much of your budget you want to actually spend, how much you want to use for re-orders and how much you want to allocate for opportunity or discounted buys. Most retailers go out and spend their entire open-to-buy budget up front and don't have the funds available to take advantage of hot sellers or special purchase opportunities, usually heavily discounted vendor excess stock.
As a general rule of thumb plan on spending only 75-80% of your buying budget up front. Keep the remaining balance in your back pocket to allow for in-season reorders on fast sellers (10-15% of budget) and the remaining (5-10% of budget)dollars on opportunity buys as they present themselves. These ratios may differ a little from retailer to retailer but the the basic premise is the same.
Remember that it us (almost) always better to chase more product than to be faced with too much inventory and excessive discounting.
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