Have you ever run into this? Your sales in the app look great every month, but when it's time to pay for a new batch of goods, you suddenly have no cash on hand — even though the profit on paper looks fine. This problem doesn't mean you're bad at selling; it usually means your working capital is stuck sitting in stock that isn't moving.
For online sellers on Shopee, Lazada, or TikTok Shop, cash is oxygen — not profit. This article will show you how much working capital you should prepare, and how dead stock quietly eats your cash.
Why 'Good Profit' Doesn't Equal 'Enough Cash'
Profit happens when you make a sale, but cash flow happens when the money actually lands in your account. Between these two points, there's a window where your money gets 'stuck' in several places:
- Money tied up in stock that you've already paid for but haven't sold
- Money held in the platform system waiting for the payout cycle after the customer confirms receipt
- Hidden costs — warehousing, packing, shipping, and return costs
Say you sell sunscreen, SKU SUN-50, at a cost of 120 baht per piece. You order 1,000 pieces = 120,000 baht in cash goes out immediately. But you only sell 200 pieces a month, so it takes 5 months to recoup your investment. During that time, that 120,000 baht can't be put to work on anything else at all.
How Much Working Capital Should You Prepare
There's no single magic number, but there are principles that actually work. Start by knowing your 'cash cycle,' then prepare enough money to cover the period before the cash comes back.
1. Calculate From Your Stock Turnover Cycle
Ask yourself how many days it takes for one batch of goods to sell out. The slower the turnover, the more money you need to set aside. The simple principle is to prepare enough cash to cover the cost of goods for at least 1-2 sales cycles plus your fixed monthly expenses.
2. Set Aside a Reserve for Big Campaign Periods
During sale festivals/major campaigns in 2026, sales spike and you'll need to order more goods in advance. That means you have to pay out a large lump of cash 'before' the sales revenue comes in. Don't pile all of your normal working capital into campaign stock.
3. Don't Forget the Money Held in the System
Money that customers have already paid but hasn't reached the payout cycle is money you can't use. Set aside a reserve to bridge this gap too.
4 Signs Your Stock Is Eating Your Cash
- Sales are flat but warehouse stock keeps growing — you're ordering in faster than you're selling out
- You have SKUs that haven't moved in over 60-90 days — like winter jacket WIN-XL that's carried over across seasons
- You have to borrow or swipe a card to pay for a new batch even though you just had good sales
- Storage space is overflowing to the point you have to rent more space = extra costs sprouting from goods that don't make money
Try splitting your products into simple groups to see the picture:
| Product Group | Characteristics | What to Do |
|---|---|---|
| Money-makers | Fast turnover, sell every day | Restock consistently, never run out |
| Regulars | Sell steadily | Order just enough, watch the real sales cycle |
| Dead stock | Hasn't moved in over 90 days | Push to clear, discount, recoup cost |
Set Up a System to Keep Cash Flowing Smoothly
Once you know the problem is 'money tied up in goods,' the fix isn't just to sell more — it's to make money turn over faster by seeing clear data and cutting fixed costs.
- Order goods based on real data, not gut feeling — look at the daily sales rate of each SKU
- Set reorder points so your money-makers never run out and dead stock never overflows
- Convert fixed costs into variable costs — for example, pay warehouse fees based on actual usage instead of renting a big chunk of space you have to pay for whether you sell or not
This is where a fulfillment system like Flash Fulfillment can quietly help. When you store your stock in a warehouse with a management system, you can see in real time which items turn over fast or slow. This helps you order more accurately, reduce over-ordering, and turn big lump warehouse costs into flexible costs that scale with actual sales — which means freeing up the cash that was once tied up so it can keep circulating.
Key Takeaways
- Good profit doesn't equal enough cash — beware of money tied up in stock and money held in the system
- Prepare working capital to cover the cost of goods for 1-2 sales cycles, plus fixed expenses and a reserve for campaign periods
- Watch for the 4 signs of dead stock, and split products into money-makers, regulars, and dead stock
- Order based on data, and convert fixed costs into variable costs to free up cash for circulation
If you want to understand how warehousing and fulfillment can help your store's cash flow more smoothly, try consulting the Flash Fulfillment team to find an approach that suits your products.
Frequently Asked Questions (FAQ)
What's the minimum working capital I should prepare?
There's no fixed number, but a workable principle is to prepare enough cash to cover the cost of goods for at least 1-2 sales cycles, plus fixed monthly expenses, and set aside a reserve for campaign periods when you need to order goods in advance.
How do I know which SKU is dead stock?
Look at how long the goods haven't moved. Generally, products with almost no sales for over 60-90 days qualify as dead stock. You should push to clear them to pull cash back into circulation, rather than letting them eat up space and cost.
How does dead stock eat cash even when it's not yet damaged?
Because the money you already paid for the goods is locked in items that haven't sold. You can't use that lump of money to restock your money-makers or do marketing. The longer it stays tied up, the more opportunity you lose and the more storage costs add up.
Does fulfillment really help with working capital?
It helps indirectly, by giving you a clearer view of your stock turnover data so you can order more accurately, and by making fixed warehouse costs flexible according to actual usage — which means less cash tied up and smoother circulation.
