Open to buyOpen to Buy (OTB)
The budget left to commit to new stock within a season's plan — what's planned to buy, minus what's already bought and on order. The discipline that stops over-buying.
By Oana Bradulet
Open to buy (OTB) is the amount of budget you still have available to commit to new stock within a season's plan. Put simply: it's what you planned to buy, minus what you've already bought and what's already on order.
It exists for one reason — to stop over-buying. A plan that isn't tracked against commitments is just a number in a deck. OTB turns it into a live constraint: every buying decision gets checked against what's actually left to spend.
OTB is the financial discipline that sits alongside the range plan and the WSSI. The range plan says what to buy; the WSSI tracks how it trades; OTB governs how much you're still allowed to commit before you've blown the budget.
The formula
There are two equivalent ways to express it, depending on whether you start from the buy plan or the stock plan.
The simplest form — start from planned purchases:
OTB = Planned purchases − On order − Already received
The stock-driven form, used when you plan to a closing-stock target:
OTB = Planned sales + Planned closing stock − Opening stock − On order
Both answer the same question: given where I'm trying to land, and what I've already committed, how much more can I commit?
Worked example
A category is planning a season:
- Planned sales for the period: £200,000 (at cost)
- Planned closing stock: £60,000
- Opening stock: £80,000
- Already on order (not yet received): £90,000
OTB = £200,000 + £60,000 − £80,000 − £90,000 = £90,000
So £90,000 is still open to commit. If a buyer wants to place a £120,000 repeat order, the OTB position says no — that's £30,000 over plan. Either the plan flexes deliberately, or the order gets trimmed. The decision is made against the budget, not from memory.
Why OTB stops over-buying
Without an OTB discipline, buying decisions get made one at a time. Each purchase order looks reasonable in isolation. The trouble is cumulative: ten reasonable orders can still add up to a season's worth of over-commitment, and you don't find out until the stock lands and the cash is gone.
OTB makes the cumulative position visible at the moment of each decision. It answers the only question that matters when you're about to commit cash: do I still have room?
OTB by category and channel
OTB is most useful broken down, not run as one business-wide figure:
- By category — so a strong category isn't starved while a weak one over-buys
- By channel — D2C, wholesale, and marketplace often have separate budgets and separate intake plans
- By delivery window — OTB for the next intake window is more actionable than a season-total figure
A common pattern is to re-plan OTB monthly as actuals come in. If sales are ahead of plan, OTB opens up — you've earned the room to buy more. If sales are behind, OTB tightens, which is exactly when you want to stop committing cash.
Where OTB goes wrong
The discipline only works if the inputs are current. The most common failure is an OTB calculation built on a stale snapshot of what's on order — a buyer commits against budget that was already spent on an order placed last week. The other failure is treating OTB as a hard ceiling that's never allowed to move; a plan should flex deliberately when trading shifts, not be busted by orders that ignore it.
Formula
- Planned sales
- = Sales planned for the period, at cost
- Planned closing stock
- = Target stock at cost at the end of the period
- Opening stock
- = Stock at cost held at the start of the period
- On order
- = Value of stock already committed on purchase orders but not yet received
Worked example
Planned sales £200,000, planned closing stock £60,000, opening stock £80,000, on order £90,000. OTB = £200,000 + £60,000 − £80,000 − £90,000 = £90,000 still available to commit. A proposed £120,000 order would be £30,000 over plan.
Common mistakes
- →Calculating OTB on a stale on-order figure. If the commitments aren't current, you'll commit against budget that's already been spent.
- →Running one business-wide OTB number. The value is in the category, channel, and delivery-window breakdown — a strong category shouldn't subsidise over-buying elsewhere.
- →Treating OTB as a fixed ceiling. The plan should flex deliberately when trading changes, not be busted by orders that ignore it.
- →Forgetting to re-plan OTB as actuals land. When sales run ahead or behind plan, the open-to-buy position should move with them.
How Lumina handles open to buy for scaling brands
Lumina can track your open to buy against the plan — what's committed, what's landed, and what's left to spend — so buying decisions are made against the budget, not from memory.
Frequently asked questions
What is open to buy?
What is the open to buy formula?
Why is open to buy important?
How often should open to buy be re-planned?
Should open to buy be tracked by category?
Related terms
WSSI— Weekly Sales, Stock and Intake
The merchandiser's weekly control document — sales, stock, and intake plotted by week, plan versus actual, across a whole season — used to steer trading decisions every week.
Range plan
The planned line-up for a season — which products and options, at what depth, for which channels — built before any buying starts.
Purchase order— Purchase Order (PO)
A formal document that a buyer issues to a supplier specifying what to ship, in what quantity, at what price, and when.