Thread by @JosephPutnam

Cash flow management can make or break your DTC eCommerce store growth. 💰

Here's why... 👇👇👇

#marketing #growth #DTCeCom

First off, eCommerce stores are CASH HUNGRY.

You need cash to purchase INVENTORY and you need cash to pay for ADS.

In a given month, you may need $50k to buy more inventory and another $25k+ in ad spend, while also needing additional money for operations.

Good news = you'll make the money back when you sell the inventory.

Bad news = you need more cash to buy more and more inventory which means you have less cash on hand even though you're making more.

I highly recommend reading Shoe Dog by Phil Knight to understand this better.

So what do you do?

First, you need to negotiate the best terms possible from suppliers.

I'm not an expert here, but you want to do anything you can to not pay for all of your inventory up front while you're waiting for it to be delivered.

Next, you're going to need a line of credit to pay for your inventory.

Some people are hesitant to take out loans, which I understand, but short-term capital is necessary so you can buy larger and larger inventory quantities as you grow.

You'll also want to use the Chase Ink Business Preferred card (bit.ly/3zGykJa) for your ad spend (a) so you have 30 days to pay back your ad spend and (b) so you earn 3X points for every dollar you spend on ads.

There's obviously a lot to learn here, but the tl;dr version is that (1) eCommerce stores are cash hungry and (2) you'll need to get comfortable managing your cash flow in order to grow.

Now, over to you...

What cash flow strategies have you found to be the most helpful for growing your eCommerce store?