Cash flow issues with inventory
Inventory buys + ad spend before cash collected create negative cash conversion cycles.
Watch these
- CCC (days)DiagnosticDays inventory + AR β APHealthy: β€ 30 daysAct at: > 45 days
- Stockouts rateLeading% sessions with OOS SKUHealthy: < 3%Act at: β₯ 5%
- Dead stockLagging% inventory > 60 days DOHHealthy: < 10%Act at: β₯ 20%
What to do
- Start POD or small MOQs; reorder on signals; negotiate deposits/terms.
- Forecast weekly; kill slow variants; bundle to clear tail.
- Use preorders for new variants; reserve ad push for stocked SKUs.