Assortment Planning and Open to Buy Services
Our warehouse services handle stock you already own: receiving it, storing it, picking it and shipping it. Assortment planning comes earlier. It decides which products you should own in the first place, how many of each, for which channel, and how much money is left to spend on them this month. This page explains how assortment planning and open to buy work, and how we help brands run both.
What Is Assortment Planning?
Assortment planning is deciding which products a business will sell in a given period, how many different items to carry in each category, and how many units of each to buy, split by sales channel and season. The goal is a range customers want to buy, in quantities the budget can support.
Two words carry most of the work. Breadth is how many different products you offer. Depth is how much you hold behind each one. Every assortment is a trade between the two, because the same budget can buy a little of many things or a lot of a few things, and it cannot do both.
Assortment planning sits between two neighboring jobs. Demand planning forecasts what will sell. Inventory planning turns that forecast into reorder points, safety stock and buy quantities for the SKUs you carry. Assortment planning decides which SKUs make the list at all, and open to buy sets how much the business can afford to spend on them.
Assortment Breadth and Depth, Explained
Breadth, sometimes called width, is the number of different products or product lines in the range. A candle brand with 40 scents has a broad assortment. A brand with four scents has a narrow one.
Depth is how far the range goes within each line and how much stock stands behind it: the sizes, colors or pack counts offered, and the units held of each variant. Retailers do not all draw the line in exactly the same place, so it helps to agree the definition before comparing plans. What matters is the question each word answers. Breadth asks how much choice the customer gets. Depth asks how long you can keep saying yes before a variant runs out.
Assortment Planning for Ecommerce Brands
Store retailers plan around shelf space, so the limit on breadth is physical. Online brands have no shelf, so the limits are cash, storage and attention. Each extra SKU needs its own stock, its own listing, its own photography and its own place in the warehouse, and a slow one ties up money that could have deepened a best seller.
Channels also want different ranges. A brand's own site can carry the full line, including slower variants that loyal customers look for. Amazon rewards a tighter list of proven sellers, because slow SKUs there build up storage fees and use capacity that Amazon limits by storage type. Wholesale and retail accounts usually buy a curated selection the buyer picks from your line. A good plan sets the assortment per channel rather than copying one list everywhere.
How Assortment Planning and Open to Buy Work Together
The assortment plan says what you intend to sell. The open to buy says how much new stock you can afford to bring in while hitting your sales, markdown and inventory targets. Neither works alone. A range without a budget becomes a wish list, and a budget without a range gets spent on whatever the loudest supplier is offering.
In practice the two are worked in a loop. A draft assortment is costed, the total is checked against open to buy, and lines are cut, delayed or made shallower until the plan fits. During the season the open to buy is updated as sales come in, which tells you whether there is room to chase a winner or whether the next order needs to shrink.
Wide and Shallow vs Narrow and Deep Assortments
There is no correct mix of breadth and depth in general, only the one that fits your catalog, your cash and how predictable your demand is. These are the common shapes, what each one costs you, and how each one tends to go wrong.
| Wide and shallow | Narrow and deep | Core plus tests | |
|---|---|---|---|
| What it means | Many different SKUs, few units of each. | A short list of SKUs, plenty of stock behind each. | A deep core of proven sellers plus small runs of new lines. |
| What it suits | Fashion, gifting and trend-led ranges where choice drives the sale. | Staples and replenishment products with steady, repeat demand. | Growing brands that need to launch new products without betting the budget. |
| Cash tied up | Spread thin across many SKUs, much of it in slow movers. | Concentrated in a few SKUs, which is efficient if they keep selling. | Most of it in the core, with a capped amount set aside for tests. |
| Stockout risk | High on any SKU that takes off, because there is little behind it. | Low on core items, as long as reorders keep pace. | Low on the core, accepted on tests until they prove themselves. |
| Overstock risk | Spread across many small leftovers that are hard to clear. | Large if a deep SKU slows down, because the exposure is concentrated. | Limited, because test quantities are small by design. |
| Typical failure mode | SKU count grows every season and nothing is ever retired. | Customers leave because the one variant they wanted is not offered. | Tests are never judged, so they quietly become a second, weaker core. |
| What to watch | Sell-through per SKU and how many SKUs sell almost nothing. | Days on hand for each core SKU and supplier lead times. | A clear rule for when a test graduates, gets reordered or is dropped. |
Sell-through, days on hand and the other stock metrics are defined, with formulas, in our ecommerce inventory management guide. Most real assortments mix these shapes by category: a brand can run its core consumables narrow and deep while keeping a seasonal gift range wide and shallow.
Signs Your Assortment Needs a Plan
Most range problems do not look like range problems. They show up as cash flow, stockouts and clearance sales.
Best sellers run out while the warehouse is full of SKUs that barely move.
New products get added every season and nothing is ever retired.
Order sizes are set by supplier minimums rather than by what the range needs.
Every channel carries the same list, whether or not it sells there.
Markdowns are the main tool for fixing last season's buying mistakes.
Nobody can say how much is left to spend on inventory this month.
Each of these is a decision about breadth, depth or budget that was made by default instead of on purpose.
What Our Assortment Planning Service Covers
The work turns your sales history and your goals into a range and a budget you can actually buy against.
SKU Range Review
Every SKU ranked by sales, margin, sell-through and stock held, so it is clear which lines earn their place and which ones only take up space and cash.
Breadth and Depth Plan
A plan for each category setting how many SKUs to carry and how deep to go on each, based on how predictable demand is and how long resupply takes.
Channel Assortments
Separate ranges for your own site, Amazon, and wholesale or retail accounts, so each channel carries the products that sell there.
Seasonal and Launch Planning
Which new products to test, in what quantities, when they should land, and the rule for judging them before the next buy.
Open to Buy Budget
A month-by-month open to buy built from your sales, markdown and inventory targets, with stock already on order taken off the top.
In-Season Tracking
Actual sales and receipts compared with plan each month, and the open to buy recalculated, so the next order reflects what is really happening.
Exit Plans for Dropped SKUs
A sell-down route for lines leaving the range, such as running stock down before the reorder, bundling it, or clearing it on a chosen channel.
Assortment planning is one part of our supply chain planning services. The forecast behind it comes from demand planning, reorder points and buy quantities for each SKU come from inventory planning, and placing and chasing the orders is purchase order management. For the stock metrics a range review relies on, including sell-through rate, see our guide to ecommerce inventory management. If Amazon is a major channel, the Amazon inventory management page covers restock limits and capacity, and retail fulfillment covers how wholesale orders ship once a buyer has picked from your line.
How an Assortment Planning Engagement Runs
Share Your Data
Sales history by SKU and channel, current stock, open purchase orders, costs and prices, and supplier minimums and lead times.
Review the Current Range
We rank every SKU and show where sales, margin and cash are concentrated, and where they are not.
Agree the Targets
Together we set the period's sales, markdown and ending inventory targets that the plan has to meet.
Build the Assortment
We draft which SKUs to keep, add, test and drop, with breadth and depth set by category and channel.
Set the Open to Buy
The draft range is costed against the open to buy and adjusted until it fits the budget. You approve the final plan.
Track and Adjust
Each month we compare actuals with plan, recalculate open to buy and flag where the next order should change.
Who Assortment Planning Suits
It is most useful once a catalog is large enough that gut feel and one spreadsheet stop keeping up.
Why Plan Your Range With RitePrep
We are a fulfillment company first, which shapes how we plan.
Plans Start From Real Counts
When your inventory sits in our Austin, Texas warehouse, the range review starts from the warehouse count rather than an estimate, and the plan is checked against what is physically on the shelf.
Budget First, Not Wish List
Every assortment we draft is tied to an open to buy, so the plan you approve is one you can actually afford to buy.
You Make the Calls
We show the reasoning behind each keep, cut and test so the decisions stay yours. The plan is a recommendation for you to approve, not a black box.
Planning Separate From Storage
Planning decides what stock should exist. Our warehouse handles the stock that does. Keeping the two jobs distinct means the plan is judged on what sells, not on what is easy to store.
No plan removes the risk of a product not selling. What a plan does is size that risk on purpose, so a miss costs a test quantity rather than a season's budget.
What Is Open to Buy? Formula and Worked Example
Open to buy, often shortened to OTB, is the amount of new inventory a business can still order for a period without overshooting its plan. It starts from what you expect to sell and what you want left at the end of the period, then subtracts the stock you already have and the stock already on order. The classic retail version is calculated at retail value, one month at a time. Planned sales plus planned markdowns plus planned end-of-month inventory, minus beginning-of-month inventory, gives planned purchases. Planned purchases minus merchandise already on order gives open to buy. Here is the calculation with illustrative round numbers for one month. They are an example only, not a benchmark.
To turn a retail figure into what you can spend with suppliers, multiply by the share of the selling price that is cost. If goods cost 50% of their retail price, $75,000 of open to buy at retail is $37,500 at cost. Fuller versions of the formula add other planned reductions, such as employee discounts and shrinkage, alongside markdowns. Many ecommerce brands prefer to run the whole plan at cost or in units, which works as long as every line uses the same basis; at cost, markdowns drop out as a separate line because a price cut does not change what the goods cost. One caution: many online explainers stop at planned purchases and call that open to buy. The two only match when nothing is on order, so subtract open purchase orders before you commit to a new one.
Questions, answered
Assortment planning is deciding which products a business will sell in a given period, how many different items to carry in each category, and how many units of each to buy, split by sales channel and season. The goal is a range customers want to buy, in quantities the budget can support.
Plan the Range Before You Place the Order
Tell us about your catalog, your channels and the season you are buying for. We will show you how an assortment plan and open to buy budget would work for your range.