How open-to-buy works
Open-to-buy (OTB) is your buying budget for a season. Instead of typing a budget, you plan what you expect to sell and how much stock you want left at the end of each month. SKU.io works out how much you still need to buy to get there. You plan it on Inventory → Merchandise Planning, one season at a time, with a row for each product category or brand.
The formula
For each row and each month:
Open-to-Buy = Planned Sales + Planned Markdowns + Planned End-of-Period Inventory − Beginning Inventory (BOP) − On-Order
| Part | What it is | Where it comes from |
|---|---|---|
| Plan Sales | What you expect this category to sell in the month. | You type it, or seed it from your demand forecast or from last year's actual sales. |
| Markdowns | Planned markdown and clearance dollars. They still use up buying budget, so they're added in. | You type it. |
| EOP Inv | The stock you want to hold at the end of the month. | You type it, or let a rule work it out (see below). |
| BOP | The stock you start the month with. | Worked out for you: the previous month's ending stock. The first month of the season uses your live inventory value. |
| On-Order | Stock already on open purchase orders due to arrive in the month. | Read from your purchase orders, by the month the stock is due, not the month you ordered it. |
The result is the Open-to-Buy row. Remaining to buy then takes off any purchase orders you've set aside against the budget. If cash is tight, enter a Cash cap in a row's Remaining to buy cell: the budget becomes the smaller of the open-to-buy and the cap. Each cell is coloured:
| Colour | Meaning |
|---|---|
| Green: Room to buy | There's budget left. |
| Amber: Nearly out — ≤10% of budget left | 10% or less of the budget is left. |
| Red: Over budget — rebalance before buying | You've committed more than the plan allows. Over-budget cells are always shown, never hidden. |
Ways to set ending stock
The EOP Inv row can follow one of three rules:
| Rule | What it does |
|---|---|
| Manual | You type the ending stock for each month. |
| Stock-to-sales | End the month holding this many times the month's sales. For example, 2 means ending with twice the month's sales in stock. |
| Weeks of supply | End the month holding enough stock to cover this many weeks of sales. |
Units, cost or retail
Plan in switches the whole grid between Units, Cost $ and Retail $. View by shows months or quarters. The SEASON column totals every month in the season.
Plan vs Actual
Once a season is under way, turn on Plan vs Actual to see actual sales and receipts beside the plan for each month, with the difference as a percentage. Actuals come from your sales orders and receipts in that category. Months that haven't started yet stay empty.
The budget check on purchase orders
With Enforce on buys turned on, the season's budget also guards purchasing. When a demand plan or a purchase order would take a category over its remaining budget, the extra quantity is held back across every supplier for that category, not just one purchase order. A buyer can override it for a product, with a quantity to keep and a reason. Every override is logged in Budget on buys & overrides, and removing one is logged too.
Open-to-buy, purchasing targets and cash
Three features plan spending, and they answer different questions:
| Feature | Question it answers | Measured in |
|---|---|---|
| Merchandise Planning (this page) | How much should we buy for each category this season to hit our sales and stock targets? | Units, cost or retail, by month |
| Purchasing targets | How much do we plan to spend with each supplier each month, and are we on track? | Money or units per supplier |
| Cash-constrained buying | Of everything we need, what can we afford to pay for, week by week? | Cash at landed cost, by the week it's paid |