Open-to-Buy (OTB) Planning Template

What this template is for

The Open-to-Buy Planning Template gives apparel brands a structured framework for calculating and managing their OTB budget across departments and planning periods. It translates high-level financial targets — planned sales, margin goals, and ending inventory — into a receipt plan that constrains buying decisions before purchase orders are placed.

It is designed for brands planning in flat spreadsheets without a connected system. The template imposes the financial discipline of OTB without requiring a platform, but has structural limitations that become material as complexity grows.

Best for: Apparel brands with 1–3 departments managing one seasonal OTB, planning in periods (months or quarters). Works for both DTC and wholesale channels when planned separately.

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Template structure

Tab 1: OTB Summary by Department

| Column | What to enter | |---|---| | Department | Category (e.g., Tops, Bottoms, Outerwear, Accessories) | | Season | SS or FW + year | | BOP inventory (cost) | Beginning-of-period inventory at cost | | Planned sales | Total planned net sales for the period | | Planned markdown $ | Anticipated markdown dollars | | Planned shrink % | Estimated shrink/loss rate | | Planned EOP inventory | Target ending inventory at cost | | Planned receipts (retail) | Auto-calculated: EOP + Sales + Markdowns − BOP | | Planned receipts (cost) | Planned receipts at retail × (1 − planned IMU%) | | Commitments to date | POs already placed | | OTB remaining | Planned receipts (cost) − commitments to date |

Tab 2: Period-Level OTB (Monthly or Quarterly)

| Column | What to enter | |---|---| | Period | Month or quarter (e.g., Feb, Mar, Apr for SS) | | BOP inventory (cost) | Carryover from prior period EOP | | Planned sales | Net sales target for this period | | Planned markdowns | Markdown dollars planned in this period | | Planned receipts | Receipts needed to hit EOP target | | Actual receipts | Receipts confirmed / received | | EOP inventory target | Ending inventory at cost for this period | | EOP inventory actual | Actual ending inventory (in-season only) | | OTB remaining | Unconfirmed receipts remaining in period |

Tab 3: Channel Split (Optional)

| Column | What to enter | |---|---| | Channel | DTC / Wholesale | | Planned sales % | % of total seasonal sales from this channel | | Planned receipts | Channel-level receipt allocation | | Commitments | POs confirmed for this channel | | OTB remaining | Remaining open-to-buy for this channel |

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The OTB formula

The core OTB calculation this template is built around:

OTB = Planned EOP Inventory + Planned Sales + Planned Markdowns − BOP Inventory

All values at cost (multiply retail values by 1 − planned IMU% to convert).

Key definitions:

• →BOP — inventory on hand at cost at the start of the planning period
• →EOP — target inventory level at end of the period (set based on planned sell-through and forward weeks-of-supply targets)
• →Commitments — purchase orders already placed but not yet received
• →OTB remaining — what's available to commit before hitting the receipt ceiling

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How to use this template

Step 1: Set your season-level financial targets in Tab 1 before building the period plan. Planned sales and planned IMU % should come from your Merchandise Financial Plan (or equivalent annual target).

Step 2: Determine your EOP inventory target for each period in Tab 2. EOP is a planning decision — it should reflect your weeks-of-supply target at each point in the selling season, not just be left as a residual.

Step 3: Calculate planned receipts by period. Receipts are derived — once you set BOP, EOP, and planned sales, receipts are what fills the gap.

Step 4: Enter commitments as POs are placed. This reduces OTB remaining in real time and prevents overbuy.

Step 5: At season midpoint, update actual receipts and actual EOP inventory. Recalculate OTB remaining for the back half of the season based on actuals, not original plan.

Step 6: Compare total planned receipts (cost) vs. OTB remaining at the close of each period. A consistently negative OTB remaining means you are overbought — a persistent positive means you are leaving potential sales revenue on the table.

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Common OTB errors in spreadsheet planning

Mixing cost and retail: OTB must be calculated consistently in cost or retail. Most errors come from mixing the two mid-calculation. This template uses cost throughout.

Forgetting markdowns in the formula: Markdowns reduce inventory value and are required in the OTB formula. Brands that omit markdowns systematically underestimate how much buying room they have.

Static EOP targets: Setting EOP once at season start and never updating means the back-half OTB is calculated against an outdated plan. Update EOP targets mid-season as actuals emerge.

Not tracking commitments: OTB remaining is only meaningful if commitments are entered as POs are placed. If commitments are managed in a separate file, OTB remaining will be overstated.

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Template limitations

This template provides OTB discipline at the department/period level but does not:

• →Auto-recalculate OTB when assortment decisions change
• →Connect receipt plan to vendor delivery windows
• →Track style-level or SKU-level OTB
• →Reconcile channel-level OTB against a total season budget in real time

When OTB management requires style-level granularity — typically above 200 active SKUs or when channel splits create material planning complexity — a connected planning platform replaces the template.