3 Ways Ecommerce Brands Can Improve Their Cash Flow

You can be profitable and still go broke.

It happens every day in consumer brands.

The unique cycle of inventory into cash, back into inventory...over and over again is complex and difficult to manage.

Sales are coming in. Gross margins look fine. The P&L says things are “working.” Meanwhile, cash is quietly draining out of the business.

Cash is oxygen. Run out, and nothing else matters.

The good news: improving cash flow doesn’t require heroic turnarounds or complex financial engineering. It comes down to a few operational disciplines executed consistently.

Here are three moves that materially improve cash flow:

1) Monitor Cash Daily (Not at Month-End)

Cash moves in real time. Inventory turns constantly. Customers are buying right now.

Yet most brands still make critical decisions using data that’s weeks old.

That’s backwards.

Month-end accounting tells you what already happened. It does nothing to help you steer what’s about to happen.

If you want control over cash, you need daily visibility into:

• How much cash you have right now
• Where it’s going
• Who it’s going to
• When it’s leaving

This level of visibility changes behavior. You spot problems early. You catch spend creep before it becomes a crisis. You make decisions with facts instead of gut feel.

When founders and operators see cash in real time, they naturally start asking better questions:

• Can we delay this payment?
• Should we accelerate this collection?
• Does this expense actually drive growth?

2) Cut Underperforming Inventory

Don’t romanticize your inventory.

If 80% of your sales come from 20% of your SKUs, you’re not “well stocked.” You’re over-assorted.

Every slow-moving SKU is cash trapped in a warehouse.

That cash can’t be used to:

• Buy winning inventory
• Fund marketing
• Hire
• Negotiate better supplier terms

Underperforming inventory creates three problems:

• Lower inventory turns
• Higher holding costs
• Less available working capital

The fix is uncomfortable but simple:

Have the courage to cut slow sellers. Reduce depth. Reduce width. Double down on what actually moves.

Freeing up trapped inventory cash often produces an immediate cash flow lift, without needing to raise prices, borrow money, or cut headcount.

It’s one of the fastest ways to improve liquidity inside a brand.

3) Deeply Understand Your Working Capital Needs

Most brand owners give up equity - or take on expensive debt - when they didn’t actually need to.

The culprit: poor working capital planning.

Founders often ask:

“How much can I raise?” Instead of: “How much do I actually need?”

Those are very different questions.

You need to understand:

• Your peak working capital requirement
• How seasonality affects cash
• How long cash is tied up between paying suppliers and getting paid by customers
• What borrowing truly costs you in dollars, not just APR

When you understand this, three powerful things happen:

1. You avoid over-borrowing
2. You negotiate from a position of strength
3. You choose the right type of capital (or realize you don’t need any)

👉 Highbeam built a free Working Capital Calculator to make this simple:

Run the math before you sign a term sheet or loan agreement.

The answer will likely surprise you.

The Bigger Picture

Most brands don’t fail because their product is bad. They fail because cash runs out.

1. Daily cash visibility.

2. Lean, high-performing inventory.

3. Clear working capital planning.

These three disciplines keep brands alive and give founders options.

If you’re a consumer brand and want help putting these into practice:

Book a call with Highbeam.

We only work with consumer brands and help operators see their cash clearly and optimize it to grow stronger, more durable businesses.