Keep your merchandise receipts under control by:
- setting delivery dates in terms of when you actually expect to need the goods
- letting resources know that you will not sanction premature shipments without good reason
- refusing or promptly returning any goods that arrive other than as ordered, in excess of amounts ordered, damaged, defective, etc.
Merchandise in transit is usually billed to your store, and thus charged to your Open-to-Buy, on the day it leaves the resource's plant. The Open-to-Buy is a figure that indicates how much merchandise may be received into a department or classification in the course of a given month without exceeding the planned inventory at the end of that month.
The less time required for the goods to travel from the resource's shipping point to your selling floor, the sooner your purchases are converted into sales, and thus into additional Open-to-Buy.
Know each resource's shipping point. This is not always the same as his showroom address. It may be hundreds of miles away -or more.
Discuss with your store's traffic manager the fastest way, consistent with cost, of bringing merchandise from each shipping point to the store. Specify these shipping instructions on your orders and insist that they be followed.
Other things being equal, consider purchasing from resources closer (in point of shipping time) to your store. Shipping time is not usually the deciding factor in choosing a resource but there can be occasions when it will help you make more profitable use of your Open-to-Buy.
In the event of actual or impending delays in transit, check promptly with your store's traffic manager. He may be able to help.
Merchandise on Order
Every unfilled or partially filled order in your file ties up Open-to-Buy. That is one reason why stores usually insist that buyers review order files regularly to:
- follow up on wanted goods
- cancel any unwanted overdue orders
- cancel any unwanted balances on partially filled orders
- settle any questions that block shipments of orders, such as, for example, a resource's request for approval of a change in price, quantity, or style
- make sure no filled or canceled orders remain in the open order file
- watch for possible clerical errors in shipping dates, retails, extensions, totals, etc.
If your inventory is larger than the planned figure, your Open-to-Buy is reduced by the difference between actual and plan. If your inventory is smaller, your Open-to-Buy is increased.
Eliminate any artificial inflation of your inventory value by:
- charging vendors back promptly for any damages, overcharges, short shipments, goods to be returned, etc.
- checking purchase journal to see that all invoices charged to your department actually belong to your department
- checking prices and price-change reports to insure absolute correctness
- taking markdowns promptly when they are needed.
- acting promptly to move slow sellers
- eliminating items, sizes, price lines, etc., for which there is little demand, unless you have some strong reason to retain them
- building shallow and wide assortments early in the season, for testing demand, but moving to narrow and deep assortments as soon as demand takes clear shape
- slowing your purchases as you reach the point of peak sales for the season.
The dollar Open-to-Buy for your department has to extend to many classifications, price lines, and other breakdowns. To make sure that it stretches as far as it should, assign priorities, and arrange to cover your most urgent needs first.
Candidates for high positions on your list of priorities include these:
- basics - because they enjoy consistent, continuing demand, and it is a disservice to customer, store, and department to be out of them
- branch store needs - because the small stocks on which branches operate do not always contain alternatives for items that have been sold out
- fast-selling styles and hot items
- merchandise to back up planned advertising
- "middle" sizes and prices that normally enjoy stronger, more consistent demand than those at the high or low ends
- merchandise that is about to enter its peak selling period.
Management's goals for your department will determine which types of merchandise you place first.
In a high fashion department, you will probably ignore most of the items listed above and give top priority to scouting for the newest ideas and styles, whenever they become available.
In a price-appeal department, on the other hand, you may give top priority to opportune buys at special prices.
In an intensely competitive store, your top priority may go to merchandise that meets and beats whatever the other retailers in your area are showing.
Set your priorities in terms of your own operation and its goals, but let priorities rather than impulse guide your apportionment of the Open-to-Buy.
