At its core, OTB is an inventory budgeting system. It calculates the dollar amount or unit count of merchandise a retailer has available to purchase after accounting for current stock on hand and outstanding orders. The Core OTB Formula
To build your spreadsheet, you need to understand the fundamental calculation. The standard retail formula for OTB (expressed in retail dollars) is:
Maximizing Retail Profit with an Open-to-Buy Excel Spreadsheet
: Inventory that has been purchased but not yet received. 3 Reasons to Use an OTB Spreadsheet
A functional OTB spreadsheet should include columns for each month or week of the planning period (typically 6 to 12 months). Essential data rows include:
OTB=Projected Sales+Planned Ending Inventory−Beginning Inventory−Already on OrderOTB equals Projected Sales plus Planned Ending Inventory minus Beginning Inventory minus Already on Order Key Components of an OTB Excel Template
While high-end retail management systems exist, an remains a solid, accessible tool for many small to medium-sized businesses to gain control over their cash flow and inventory levels. What is Open-to-Buy (OTB)?
: Anticipated discounts or promotions that will reduce the retail value of your inventory.