Open-to-Buy Planning for Apparel Brands
Know exactly how much budget is available before you plan. RetailNorthstar calculates your OTB position in real time and connects it directly to assortment planning — so buying decisions always stay within financial guardrails.
What is Open-to-Buy (OTB) planning?
Open-to-Buy (OTB) planning is a merchandising finance tool that tracks and controls inventory purchasing budgets. It calculates how much a buying team is authorized to spend on new inventory in a given period, based on planned sales, inventory targets, and current stock levels.
The core OTB formula is: OTB = Planned Sales + Planned EOM Inventory − BOM Inventory − On Order
In practice, OTB planning requires real-time data from multiple sources — current stock positions, open purchase orders, planned sales targets, and markdown reserves. In spreadsheets, this data is stale by definition. In RetailNorthstar, it updates automatically.
- Real-time OTB calculationOTB position updates automatically as assortment and buy decisions change — no manual recalculation
- Receipt plan managementTrack confirmed PO commitments against planned receipts by period, vendor, and category
- Markdown reserve modelingSet aside markdown budget within OTB to protect full-price sell-through targets
- Category-level OTBManage OTB at the department, category, and sub-category level with automatic rollup to total
- Seasonal OTB structurePlan OTB by season — spring/summer and fall/winter — with carry-forward inventory logic
OTB planning vs assortment planning
OTB and assortment planning are related but distinct processes. Understanding the relationship is critical for building a connected planning workflow.
Answers: How much can we spend?
OTB planning establishes the financial guardrails for a buying period. It calculates available budget based on sales targets, inventory goals, and existing commitments. OTB is the financial control layer — it does not decide what to buy, only how much.
Currently viewing: OTB Planning →Answers: What should we carry?
Assortment planning determines which specific styles, colors, and sizes to carry within the OTB budget. It uses OTB as its financial constraint and translates it into a product strategy at the style level.
See: Assortment Planning →In RetailNorthstar, these two processes are connected. As assortment decisions are made, the OTB position updates in real time. Buyers never need to manually reconcile assortment files against OTB budget files — the data model does it automatically.
Why spreadsheet OTB fails at scale
Spreadsheet OTB was a workable solution for small buying teams managing simple seasonal buys. At scale — multiple categories, multiple channels, multi-tier vendor structures — it breaks down in predictable ways.
Stale data
Spreadsheet OTB is only as current as the last time someone manually updated it. Receipt confirmations, PO changes, and sales actuals all require manual entry. By the time a buying decision is made, the OTB position may be hours or days out of date.
Disconnected from assortment
When OTB lives in one file and assortment planning in another, buyers work against different numbers. The reconciliation step — aligning what was planned against what the OTB can support — is manual, slow, and error-prone.
Single-user bottleneck
Shared OTB spreadsheets require one person to maintain the "live" version. When multiple team members need to access or update the same OTB, version conflicts emerge and teams revert to emailing files.
Formula fragility
OTB spreadsheets accumulate years of formula complexity. A single broken reference — common when rows are inserted or copied — can silently corrupt the OTB calculation without any visible warning.
OTB is the first step in the planning workflow
Set financial guardrails. Calculate available budget by category and channel. Establish receipt plan and markdown reserve.
Choose which products to carry within the OTB budget. Plan at the style, color, and size level.
Convert assortment decisions into structured buy plans with quantities, vendors, and size curves.
OTB planning questions
What is Open-to-Buy (OTB) planning?
Open-to-Buy (OTB) is a merchandising finance tool that tracks and controls inventory purchasing budgets. It calculates how much a buying team is authorized to spend on new inventory in a given period, based on planned sales, inventory targets, and current stock levels. OTB planning prevents overbuy and underbuy.
How does RetailNorthstar improve OTB planning vs spreadsheets?
RetailNorthstar provides real-time OTB calculations that automatically update as assortment and buy decisions change. Unlike spreadsheets, there is no manual reconciliation required across files. Finance and merchandising teams see the same OTB position at the same time.
See OTB planning in action.
Book a live demo and see how RetailNorthstar connects Open-to-Buy planning directly to assortment decisions — no manual reconciliation required.