Open-to-buy

Also: OTB

Open-to-buy is the budget a buying team still has available to commit to stock for a period: planned sales, planned markdowns and planned closing stock, less stock on hand and orders already placed. It is an internal planning control, expressed at cost or at retail value. Listed companies do not report it; its effects appear later in inventory and gross margin.

Fashion businesses that react in season hold back part of the open-to-buy at the start of a season for reorders and new options once early sales are read. When sales run below plan the budget shrinks, and the cut falls on orders not yet placed.

Test and reorder · Markdown · Inventory days