August 2023 - 33

TECHNOLOGY
achievable goal for restocking merchandise. By accurately
accounting for sales figures, markdowns and future orders,
you can develop an OTB plan that ensures you always have
the right amount of stock on hand.
Another benefit is increased flexibility when managing
inventory. With OTB, you have an accurate view of how
much money is available in your budget for new purchases
and how much merchandise you need to replenish each
month. This real-time information allows you to make
adjustments as needed, which helps maximize profit
potential and reduces risk.
Finally, OTB helps stores maintain better relations with
suppliers by clearly indicating how much inventory will
be needed each month. This minimizes any problems
associated with overcommitting or under-committing
to certain vendors and creates a more favorable working
environment between retailers and suppliers.
Creating an Effective OTB Plan
Retailers should take several steps to ensure success in
their OTB plan:
* Analyze past sales data to develop an accurate forecast
for upcoming periods. This will determine how much
inventory will be needed in future periods.
* Calculate current stock levels to determine how much
space is available for new product purchases. This will
help them identify ideal timeframes for buying.
* Set realistic goals for OTB plans that are attainable and
manageable. This will help them make sure that there are
adequate funds leftover for other business investments.
* Optimize stock according to customer demand.
This will ensure that their store has the right mix of
merchandise that customers want.
* Monitor sales trends and adjust OTB plans
accordingly. This will prevent any issues with
understocking or overstocking.
Common Challenges
When it comes to managing OTB inventory, there are
certain challenges that store owners face; knowing these
challenges can help to create a more effective plan.
* Limited resources: One of the biggest challenges with
OTB is having the resources to implement it successfully.
This is especially true for small retailers who may not
have the budget for tools or software to help manage
inventory and accurately calculate their OTB.
* Estimating sales and trends: Another challenge is being
able to estimate future sales and patterns accurately.
OTB is based on historical sales data. Still, if you cannot
predict how customer trends will change, then it's
difficult to determine your optimal inventory levels at
any given time.
* Too much focus on inventory: Relying too heavily on OTB
can cause you to focus too much on your inventory levels
at the expense of other factors such as merchandising,
customer service or experience. This can lead you away
from maximizing profits and customer satisfaction,
which should be your ultimate goal as a retailer.
Solutions to Maximize Results
Now that you understand the basics of OTB inventory
management, let's focus on maximizing results. Here are
some tips to help you get the most out of your OTB:
* Create a clear plan. Create a plan for how and when
you want to buy and replenish inventory. This will
make it easier to manage the ebbs and flows of your
store's daily demand and future supply needs.
* Allocate appropriate funds. Ensure you set aside
enough funds in your budget to cover current and
future buying needs. Not having enough money can
strain your cash flow, so ensure you have an adequate
cushion to help with any unexpected costs or delays.
* Track your results. Finally, remember to track your
OTB results so that you can adjust and modify them
as needed. Pay attention to what is selling well and
when, as well as what isn't selling and why. Make
adjustments accordingly to ensure optimal results in
future ordering cycles.
By following these tips, you can be confident that the
performance of your OTB inventory management system
is meeting both current needs and future expectations
for sales growth.
What Type of Retailer Is OTB Suitable For?
OTB planning is a replenishment tool used by many
businesses, but not all commodity categories are appropriate
for it. Industries with regularly changing products can benefit
the most from OTB. Retailers with many SKUs, such as
clothing and liquor stores, find OTB helpful, too.
Additionally, it's beneficial for seasonal businesses -
wherein retailers need to buy inventory in advance and
decrease supply as time moves on. However, OTB is not
designed for items like perishables, toiletries, snack foods
or any everyday items. It's better to use an automatic
replenishment schedule since they consistently sell
throughout the year without any significant sales fluctuations.
Key Takeaways
OTB inventory management can be an excellent tool
for retailers. It allows store owners to manage inventory
more efficiently in order to maximize profits. However,
it is not a one-size-fits-all solution, and there are limits
to what it can do. It should be used in conjunction with
other inventory-management techniques and strategies
to ensure the best results.
With the right plan and knowing your limits, OTB inventory
management can help save money, prevent overbuying and
optimize profits. By leveraging the right mix of OTB and
other inventory-management measures, retailers can create
a compelling, profitable inventory plan. By using the right
software, the process can become even easier.
Martial Amoussou is a content manager at Combase
USA, a company that provides point-of-sale solutions and
inventory management tools to retailers of all types and
sizes. He writes about trends and tips for growing retail
businesses. Learn more at koronapos.com.
LGRMAG.COM | 33
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August 2023

Table of Contents for the Digital Edition of August 2023

Editors' Letter
Table of Contents
Headlines
Calendar
Editors' Picks
Innovator of the Year: Meet the Lawn & Garden Retailer Innovators of the Year!
Special Advertising Section
Technology: Open-to-Buy Inventory Management Key for Retailers
Green Goods: Trial-Proven Produce
Product Focus: Garden Pharmacy
Marketplace
Ad Index
5 Minutes With ...: Ken Lain
August 2023 - 1
August 2023 - 2
August 2023 - 3
August 2023 - Editors' Letter
August 2023 - 5
August 2023 - Table of Contents
August 2023 - 7
August 2023 - Headlines
August 2023 - 9
August 2023 - 10
August 2023 - Calendar
August 2023 - Editors' Picks
August 2023 - 13
August 2023 - Innovator of the Year: Meet the Lawn & Garden Retailer Innovators of the Year!
August 2023 - 15
August 2023 - 16
August 2023 - 17
August 2023 - 18
August 2023 - 19
August 2023 - 20
August 2023 - 21
August 2023 - 22
August 2023 - 23
August 2023 - 24
August 2023 - 25
August 2023 - 26
August 2023 - 27
August 2023 - 28
August 2023 - 29
August 2023 - Special Advertising Section
August 2023 - 31
August 2023 - Technology: Open-to-Buy Inventory Management Key for Retailers
August 2023 - 33
August 2023 - Green Goods: Trial-Proven Produce
August 2023 - 35
August 2023 - 36
August 2023 - 37
August 2023 - 38
August 2023 - 39
August 2023 - 40
August 2023 - 41
August 2023 - Product Focus: Garden Pharmacy
August 2023 - 43
August 2023 - Marketplace
August 2023 - 45
August 2023 - 46
August 2023 - 47
August 2023 - Ad Index
August 2023 - 49
August 2023 - 5 Minutes With ...: Ken Lain
August 2023 - 51
August 2023 - 52
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