Lesson 4 of 6
Inventory, returns, fulfilment and cash flow
Learning objectives
- Understand why profitable brands run out of cash
- Spot return-rate and sizing risk early
- Track stock turn and dead stock
- Plan reorder points before you need them
Profitable on paper, broke in real life
Product businesses can run out of cash even when sales look good. Stock is often paid for months before it sells. Returns reduce cash and margin. Sizing issues quietly raise return rates on apparel. Fulfilment costs creep. Slow-moving stock traps cash you can't get back.
Cash flow matters more than vanity sales.
The terms you need to own
MOQ (minimum order quantity), stock turn, dead stock, return rate, pick and pack, shipping, refunds, reorder point, cash gap between buying stock and receiving sales.
Founder insight — Derrick Twum
The MEMFitness product experience is clear: launching products is the easy part. Stock, fulfilment, returns and cash flow can quietly destroy a brand that looks healthy on the front page.
Key takeaway
Track cash, not just sales. A profitable brand can still die from a cash gap.
Reflection questions
- 1How much cash is currently tied up in stock?
- 2What's your honest return rate on apparel?
- 3What happens to cash flow if the next reorder lands a month early?
Action task
Audit your current or planned inventory: stock value, return risk, reorder point, cash tied in stock.
Worksheet
Work through these prompts. Answers save to this device.
Answers are saved to this device only. Cloud sync coming soon.