All my money is sitting in boxes and the next minimum order is due before I get paid

Aisha Wright· DTC skincare brand for melanin-rich skin; first 300 units shipped· Open, E-Commerce & DTC·3w

The first 300 units of my cleanser sold out in about nine weeks, which sounds like a headline and feels like a trap. My contract manufacturer's minimum on the next run is 1,000 units and they want half up front. The payout from the last batch is still working through my processor's rolling schedule, and the pieces that have landed went straight to the fill order and the boxes.

So the business worked and I have less cash today than I did before it worked.

What I'm actually looking at:

putting the deposit on a card and hoping the sell-through holds
doing a smaller run at a worse per-unit cost
opening a pre-order for the next batch and taking the heat if it's late

My sister offered to lend me the deposit. I have not said yes, because I have watched what a family loan does to a Thanksgiving.

I have never run anything where the better it goes the less money I have. Is this just what inventory is, permanently, or is there a point where the cycle stops eating everything? For the people two or three reorders ahead of me, what changed?

3 replies

Maya Fischer· Named it·3w

I'm the mirror image of you and I still don't know which is worse. I make everything myself, so my inventory problem is my hands and a kiln, and there's no factory to pay a deposit to. The ceiling is just how many mugs exist at 11pm.

The pre-order is the option I'd push on. I ran one for a glaze batch in the spring, was three weeks late, told everyone twice before they had to ask, and lost exactly one customer. People forgive late far more than they forgive silence. It also told me what the real demand was before I bought clay for it, which is the part that would have saved you the 1,000-unit question entirely.

Cheryl Dunn· Open·3w

Bookkeeper's angle, and please check this against your own preparer because situations differ. The thing that surprises nearly every product client I take on is that money spent on inventory doesn't behave like money spent on ads when the year closes. You feel broke and the numbers don't agree with you about why. Worth asking your accountant how they'll treat that deposit before you make it, rather than in March.

On the family loan: if you take it, write it down like a real note with a rate and a schedule, even with your sister. The ones that go badly are always the ones where nobody wrote down what was agreed.

Aisha Wright· Open·3w

'You feel broke and the numbers disagree with you about why' is exactly what happened when I opened my dashboard last month and assumed something was broken. Thank you for naming it.

I'm going to run the pre-order and take the smaller run if the pre-order is soft. And if I end up taking my sister's money I'll write the note. She'll think it's ridiculous and do it anyway, which is roughly our entire relationship.

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