Open-to-Buy Calculator for Retail Stores

Calculate how much you can spend on new inventory this month or season. Open-to-buy planning keeps you from overbuying (tying up cash) or underbuying (losing sales to empty shelves). Built for independent retailers, gift shop owners, garden centers, and home decor store buyers.

What Is Open-to-Buy and Why Does It Matter?

Open-to-buy (OTB) answers the single most important question in retail buying: "How much can I spend on new inventory right now?" It's the difference between how much inventory you need for the period and how much you already have on hand or on order. The result is a dollar amount — your purchasing budget.

Think of it like a checking account for inventory. Your planned sales and markdowns are money going out (inventory leaving your shelves). Your beginning inventory and on-order goods are your current balance. Your desired end inventory is the minimum balance you want to maintain. OTB tells you how much you can "deposit" (buy) without overdrawing.

Without an OTB plan, most independent retailers fall into one of two traps. Overbuying means tying up cash in slow-moving inventory that sits on shelves for months, eventually getting marked down at a loss. You wanted to carry those new candles, but now you can't afford to restock the hooks that actually sell. Underbuying means running out of your best-sellers mid-season — customers walk in, don't find what they came for, and leave. Those lost sales never come back. OTB planning prevents both.

Here's what each piece means. Planned Sales is how much you expect to sell during the period, at retail prices. Planned Markdowns are any clearance discounts or promotions that will reduce your inventory value. Desired End Inventory is your target stock level at the end of the period — the amount you want left on shelves to keep selling while your next orders ship. Beginning Inventory is what you currently have. On Order is inventory you've already purchased from vendors that hasn't arrived yet.

All values are entered at retail price, not wholesale cost. This is because your POS system, inventory reports, and sales data all track retail values. The calculator converts your OTB to wholesale cost automatically based on your margin, so you know exactly what to write on your purchase orders.

How to Use Open-to-Buy Planning

A Quick Example

Say you run a gift shop and it's the start of April. You expect to sell $10,000 this month. You plan $500 in markdowns on clearance Easter items. You have $25,000 in inventory on shelves right now, and $3,000 in orders arriving from vendors. You want to end April with $22,000 on shelves (enough to cover May while new orders come in).

OTB = $10,000 + $500 + $22,000 − $25,000 − $3,000 = $4,500 at retail. At a 50% margin, that's $2,250 at wholesale cost. That's your April buying budget. You can place $2,250 worth of wholesale orders this month and hit your inventory targets.

Retail vs. Cost OTB

The OTB formula works in retail dollars because that's how your inventory and sales are tracked. But when you pick up the phone to place a wholesale order, you're spending cost dollars. To convert, multiply your retail OTB by (1 − your margin). At a 50% margin, a $10,000 retail OTB means you can spend $5,000 at wholesale cost. At a 60% margin, that same $10,000 retail OTB is only $4,000 at cost. This calculator shows both numbers automatically.

More Retailer Tools

Retail Markup Calculator — Enter your wholesale cost and desired margin or markup to instantly calculate your retail selling price and profit per unit.

SKU Generator — Create consistent, well-structured SKU numbers for your retail inventory. Build a naming system that scales with your store.

Reorder Point Calculator — Know exactly when to reorder a product so you never run out of stock or tie up cash in excess inventory.

Sales Per Square Foot Calculator — Measure your store's revenue efficiency and compare against industry benchmarks for gift shops, garden centers, and home decor stores.

Last updated: March 2026