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Tips for Retailers: 5 Ways to Improve Your Cash Flow

July 7, 2016

The biggest lag on a retailer’s cash flow can be seen in the first 30 days—it’s the merchandise. But you can do more than wait and watch if you want to protect your business.

Check out the video below to learn five tips to help improve your cash flow.

Want a sneak peek? Here are the basic ideas:

1.     Make sure merchandise arrives in the proper season.
Don’t let your money sit on the sales floor in the hopes it’s going to sell in a different season.

2.     Set target sell-through.
How many units have to sell in 30 days for it to be considered a good buy? 20%? 40%? Decide before you buy.

3.     Tell your rep it sells or it’s refunded.
Don’t be afraid to approach your reps as a partner and let them know that if the merchandise doesn’t move within the first 30 days, you’re going to want to return it for a refund.

4.     Don’t plan purchase volume only by previous units sold.
Employee purchases can often skew sales reports for new merchandise.

5.     Clear it out quickly.
If it doesn’t sell in the first 30 days and the rep won’t take it back, put it on clearance. Poor cash flow is often the direct result of slow moving merchandise.

[image: Womens Clothing Store by Bell Ella Boutique on flickr]