This page is for an export retail buyer or planner who has to explain why a spending limit is set before a single style is chosen for a season. At work, a buyer who skips this step can fall in love with a style's own strong margin, place the order, and only then discover the season's own budget was already spent on earlier styles. This lesson mainly teaches the money flow: it shows how open-to-buy, a season budget minus what has already been committed, decides whether a style can be bought at all, before its own margin or its own design is even discussed.
Fairway Stores, a department-store chain that buys Order A wholesale from Northline Apparel, sets a season budget of USD 90,000 for a T-shirt category built around Order A's own quantity and price. Its buying team has already committed USD 55,000 of that budget to other styles already confirmed this season. Without this skill, a buyer approves a new style purely because it looks strong on its own, without first checking whether the season still has open-to-buy left for it.
You need: no previous lesson, though T20-C01-L02 on sell-through and stock cover gives useful background on how a retailer reads its own sales.
By the end of this lesson you can:
Not covered here: turning an approved season budget into a week-by-week plan (lesson T20-C02-L02) and adjusting that plan once real sales come in (lesson T20-C02-L03).
| Term | Meaning |
|---|---|
| Open-to-buy | A retailer's season budget minus its committed spend: the amount still available to commit to any range. |
| Season budget | The total amount a retailer plans to spend buying stock for one season, set before it sees every brand's final range. |
| Committed spend | The value of purchase orders a retailer has already confirmed against its season budget. |
| WSSI | A weekly sales, stock and intake plan: the week-by-week table a retailer builds once open-to-buy is approved. |
| Intake | New stock arriving into a retailer's own stockroom or distribution centre in a given week, from a confirmed order. |
| Wholesale price | The price a brand charges when it sells the finished goods on, for example to a retailer such as Fairway Stores. |
A retailer sets a season budget for what it expects to spend on a category, then subtracts every purchase order it has already committed to reach its own open-to-buy: the amount still free to commit. A style's own margin, fabric, or design only matter once open-to-buy confirms there is room to spend on it; a style with an excellent margin cannot be bought if the season budget is already spent. Checking the money available before judging the style is what stops a retailer running out of budget partway through a season.
A buyer meets several shapes of open-to-buy across a normal working year, and checking each one correctly stops an attractive style from being approved with no real budget behind it.
| What can differ | The shapes you will meet | Why it matters |
|---|---|---|
| Export Make to Order buying through a factory | Fairway Stores commits spend once Northline Apparel confirms a production slot with Delta Garments for Order A's own quantity. | Spend is committed at order confirmation, well before the goods exist, so open-to-buy must already allow for the full order value, not only a deposit. |
| Domestic Make to Stock buying against a forecast | A domestic retailer such as Cedar & Co. commits its own season budget against its own sales forecast, before any final customer has bought anything. | The forecast itself can turn out wrong, so open-to-buy set against a forecast carries more risk than open-to-buy set against a confirmed export order. |
| A reorder placed on a style that already sold well | Fairway Stores reorders more of Order A's own T-shirt once it sells faster than planned. | A reorder still draws down open-to-buy exactly like a new style; strong early sales do not create extra budget on their own. |
| A season budget reallocated between categories | Fairway Stores' buying team moves open-to-buy set aside for one category to a better-performing one instead. | Reallocation changes which category gets the remaining open-to-buy, but it never creates open-to-buy beyond the original season budget. |
Fairway Stores set a season budget of USD 90,000 for its T-shirt category and has already committed USD 55,000 across other confirmed styles. Its buying team wants to confirm Order A's own 15,000-piece run at Northline Apparel's wholesale price of USD 8.00 per piece, but only for a first commitment of 5,000 pieces this season, worth USD 40,000. Before agreeing anything with Northline Apparel, the buying team checks whether that USD 40,000 fits inside what remains of the season budget.
The 5,000-piece commitment is short by USD 5,000 against Fairway Stores' own remaining open-to-buy. The buying team cannot confirm the full 5,000 pieces with Northline Apparel until it either reduces the quantity to about 4,375 pieces, reallocates open-to-buy from a weaker style already committed, or asks for a season budget increase.
The methodA common mistake is a buyer confirming a production slot with a factory because the style looks strong on its own, without first checking whether the season budget has open-to-buy left. Once Delta Garments starts cutting fabric against a confirmed Make to Order commitment, cancelling or reducing the quantity later carries its own real cost, since cut fabric and part-made goods cannot simply be returned to stock. What this costs a retailer that gets it wrong is real: a USD 5,000 overcommitment on one style can force a cut to a later, possibly better-performing style once the season's true remaining open-to-buy is discovered. It also damages the relationship with the factory: Delta Garments plans its own cutting room around confirmed orders, and a retailer that confirms, then reduces, a quantity after cutting has begun asks the factory to absorb fabric it already cut for a piece count that no longer exists. A buyer who checks open-to-buy first, before any word reaches Northline Apparel or Delta Garments, never puts the factory in that position at all.
A retailer decides how much it can spend before it decides what to spend it on. The season budget is the total available; committed spend is what has already been promised to suppliers; open-to-buy is the difference, the money still free to commit. A style's own strengths only matter once open-to-buy confirms there is room to buy it. A retailer that confirms an order with a factory before checking its own remaining budget can promise more money than it actually has, forcing a costly change once cutting has already started.
Fairway Stores' season budget for its T-shirt category is USD 90,000, with USD 55,000 already committed. Northline Apparel offers to confirm a 5,000-piece first commitment of Order A at its wholesale price of USD 8.00 per piece, worth USD 40,000, with Delta Garments ready to start cutting fabric within the week if confirmed.
Here is the note Fairway Stores' buying team actually wrote before replying to Northline Apparel:
Can Fairway Stores confirm the full 5,000-piece commitment this week? Decide before opening the answer.
No, not at the full 5,000 pieces. Two figures in the buying team's own note decide this.
First, Fairway Stores' own open-to-buy is USD 35,000. That is the season budget of USD 90,000 minus the committed spend of USD 55,000, and it is USD 5,000 short of the proposed USD 40,000 commitment.
Second, once Delta Garments starts cutting fabric, that commitment is hard to unwind. Confirming the full quantity and finding the shortfall later would mean paying for cut fabric the season budget never actually covered.
Fairway Stores' buying team can confirm about 4,375 pieces (USD 35,000 divided by USD 8.00), confirm the full 5,000 pieces only after reallocating open-to-buy from a weaker style, or ask Northline Apparel to hold the slot one more week while a budget increase is requested. Confirming the full quantity without one of those three steps would overcommit the season budget by USD 5,000.
Using this lesson's own illustrative figures:
A USD 5,000 overcommitment against a USD 90,000 season budget is a 5.6% overrun on this one style alone. Once fabric is cut against a confirmed Make to Order commitment, Delta Garments cannot simply return that fabric to stock, so an overcommitment discovered after cutting starts costs more than the same overcommitment discovered before confirmation, when the quantity can still be adjusted for free.
Open the course workbook's "Open-to-buy" sheet. It lists the season budget, every committed purchase order, and calculates remaining open-to-buy automatically. Enter a new style's own required spend to see immediately whether it fits inside the remaining open-to-buy, before Northline Apparel is asked to confirm anything with Delta Garments.
[Download the Open-to-buy and WSSI worksheet](../../templates/T20-C02-open-to-buy-and-wssi-worksheet.xlsx)
1. What does open-to-buy measure?
2. A retailer has a season budget of USD 60,000 and has committed USD 48,000. A new style needs USD 9,000. Can it be confirmed from open-to-buy alone?
| EN | AR | FR | TR | Meaning |
|---|---|---|---|---|
| Open-to-buy | الرصيد المتاح للشراء | Budget disponible (open-to-buy) | Alıma açık bütçe (open-to-buy) | A retailer's season budget minus its committed spend: the amount still available to commit to any range. |
| Season budget | ميزانية الموسم | Budget de saison | Sezon bütçesi | The total amount a retailer plans to spend buying stock for one season, set before it sees every brand's final range. |
| Committed spend | الإنفاق الملتزم به | Dépenses engagées | Taahhüt edilen harcama | The value of purchase orders a retailer has already confirmed against its season budget. |
| WSSI | WSSI | Plan hebdomadaire ventes, stock et réassort (WSSI) | WSSI | A weekly sales, stock and intake plan: the week-by-week table a retailer builds once open-to-buy is approved. |
| Intake | الوارد | Arrivage | Mal girişi (intake) | New stock arriving into a retailer's own stockroom or distribution centre in a given week, from a confirmed order. |
| Wholesale price | سعر الجملة | Prix de gros | Toptan fiyat | The price a brand charges when it sells the finished goods on, for example to a retailer such as Fairway Stores. |
You now know open-to-buy is checked before any style is chosen. The next lesson shows how a retailer turns an approved season budget into a week-by-week sales, stock and intake plan. Back to the course map