Open To Thrive – Retail Inventory Control Solution
February 5, 2009 by Rick Segel
Filed under Merchandising/Buying, Tools
Did you go into business because you love accounting?
I doubt it. Retailers don’t get into trouble because they over buy, they get into trouble because they don’t know they’ve overbought.
Do you feel your inventory is accurate within $500?
If the answer is no Open To Buy will fail you. Watch this 4 minute video and I’ll explain why.
A simple, hands-on system that tells you exactly how much merchandise to buy in order to be more profitable! It’s simple, it works, and it takes 10 minutes a day.
“Open to Thrive” was designed as a simple to understand and use alternative to the more cumbersome open to buy and financial budgeting systems. Although open to buy systems work, much time and energy is needed for upkeep and maintenance. My belief is that smaller, independent retailers, who make their money either on the selling floor or by selecting the right merchandise, don’t have the time required to maintain a traditional open to buy system.
Even if you use a traditional open to buy system, my “Open To Thrive” solution will work in conjunction with it. It will serve as a back up and as a quick reference because the information can be retrieved more quickly than with any computer system. The reason why I am so passionate about it is because I have seen the success of retailers who use it. This system WORKS!
The Open To Thrive System is available here for non-members of The Retailer’s Advantage or is included here for members. Also see my bundle offer containing a free trial to The Retailer’s Advantage here.
PLEASE NOTE
This version of the “Open To Thrive” System requires Microsoft Excel. If you do not have Microsoft Excel please use the printed version below.
OpenToThrive.xls – This is the system itself.
OTT User Guide.pdf – This is the User Guide.
IF YOU DO NOT HAVE MICROSOFT EXCEL
You may use this manual version of Open to Thive:
The OTT you guides with the thumb rule of 55%-40%-5% for merchandise-expenses-cash flow respectively. Is this formula a constant for all stores ??.
My lifestyle store has a gross margin of 30 % (mark down).
Than the expense % would be the same @ 40 % ?? or the formula may vary ???
Plz guide me .
The formula may (and should!) vary by the type of store you have. However, you want to make sure you’re allocating enough money to cover both new inventory purchases and meet your expenses.
The 55% refers to 55% of your income from sales should be devoted to buying new inventory — so if you’re buying inventory that allows you a GM of 30%, you’re able to purchase that amount of inventory in the ratio of 55% of sales.
The danger many retailers get into is that they overbuy: you don’t want to position yourself with so much money devoted to inventory that there’s not enough to meet your expenses nor allow any profit.
Cindy thanks for the guidelines.
But i would request you again to expalin more specificically. If my GM is 30 % should i make the formula to 70%-25%-5% for meeting for merchandise(70%)-Expenses(25%)- Cash Flow (5%) respectively. OR stick to 55-40-5 formula.
Cindy as my GM is 30 % than should i have to spare 40 % for the expenses.Isn’t it much more?? And by spending 55 % on merchandise would i be under stock a the end of the year ??
Plz guide i am still confused.
If you can meet your expenses by allocating only 25% of sales, then yes, adjust the formula to 70/25/5 — however, I would urge you to make SURE that you can meet all of your expenses with only 25% of sales. That percentage seems particularly low: are you including your rent/payroll/insurance/everything else and meeting all of that with only 25% of sales?
Where do I downlaod