How Tied-Up Inventory Destroys Your Cash Flow
The Cash Flow Crisis
Your bank account shows $5,000. But you have $50,000 sitting in inventory on shelves. You're "profitable" on paper but can't pay bills. This is the inventory cash flow trap — and it kills more Shopify businesses than low sales.
The Inventory-Cash Flow Equation
Cash Flow = Revenue - (Inventory Investment + Operating Costs)
The more cash tied in inventory, the less available for growth
The key metric is inventory turnover ratio — how fast you sell through inventory. Higher turnover = better cash flow.
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Order the right amount at the right time. Sales velocity analysis ensures you invest in inventory that sells fast.
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