CASHBEFOREGROWTH

A note before you start

Profit is an estimate. Cash is a fact. A brand can sell more every month, book a profit every quarter, and still miss payroll, because the money it earned is sitting in a warehouse, on a ship or in a payment processor’s queue.

Those two numbers frame the guide. The first is what it looks like when customers fund the business: growth makes cash instead of eating it. The second is what it looks like when the cycle turns. Peloton’s customers paid up front while demand ran ahead of supply; when demand fell, it was left holding stock it had paid for, and raised about $1.9 billion in a year to keep going.

Most DTC brands sit closer to the second. They pay a supplier deposit months before the goods land, pay the balance before the ship sails, hold the stock for months, and wait days more for the payout. That’s why fast-growing brands with healthy margins run out of cash, and why the fix is usually about timing rather than profit.

Growth is paid for in advance. The only question is by whom.

This guide is about who pays, and when: the cash cycle, the ways customers can fund the stock, the supply side, and the weekly meeting that keeps it visible. It stays on timing and the balance sheet. Contribution margin and payback are covered in The Whole Machine.

How to read it

Start with The Cash Audit; your lowest checks name the chapters to read first. Growing fast: chapter 2, 3 and 13. Planning a launch: 6 to 8. Running operations or finance: 10 to 14. Analyst: chapter 3, then Appendix A.

Three tools and the audit run in the page. Nothing you type leaves your browser.

What’s proven and what isn’t

• Filed: numbers from securities filings, here Costco’s, Dell’s, Peloton’s and Starbucks’, with the filing named.
• Published: peer-reviewed research, books and articles by the researchers themselves, statutes and regulator guidance, with the date they were true.
• Reported: what a named company or outlet published. Payment companies describe their own payout terms, and those terms change, so check your own agreement.
• Derived: my arithmetic on filed, published or reported numbers, with the inputs shown.

Examples that open with Say or Picture use made-up round numbers. Every source is listed in Appendix C. The chapters on the rules are an operator’s summary as of September 2026, not legal, tax or financial advice.

Picture a brand that imports its product. It pays a 30% deposit when it places the order, the balance when the goods ship, and waits for them to cross the ocean. Then it holds them until they sell, and waits for the payout.

DerivedWeighting the deposit and balance by their share of the order, the cash is out for about 134 days on average: 0.3 × 179 + 0.7 × 114. That’s this brand’s cash conversion cycle. The inputs are the defaults in the tool in chapter 3.

The first four rows are the cycle. The last three are how customers can fund it.

Do this

• Draw this chart for your best-selling product from your last purchase order: deposit, balance, arrival, sell-through and payout. It takes twenty minutes.

The audit isn’t about how much cash you have. It’s about whether you can see the next three months coming, and whether the way you buy, sell and pay works for you.

Open your bank accounts, your processor payout reports, your open purchase orders and your inventory report. Score each check 0 to 2: 0 if it failed or nobody can answer it, 1 if partly true, 2 if clean. “Our accountant has that” scores 0 unless the accountant can answer today.

If nobody can say when the money comes back, nobody is managing it.

The twelve checks

1. You know your cash conversion cycle, including payout lag · 5 minLook at: Your last three purchase orders and your processor payout reports.
   Good: Someone can say, in days, how long cash is out from the supplier deposit to the customer’s payout reaching the bank, for your top products.
   Cost if wrong: You plan growth on profit and find out about the cash gap from the bank balance.
   Read next: The Cash Conversion Cycle
2. Every open purchase order’s payments are on one calendar · 4 minLook at: Your open POs.
   Good: Each deposit and balance payment, with its amount and date, sits in one list that the person running cash reads weekly.
   Cost if wrong: A balance payment lands in the same week as a tax bill and a slow payout, and nobody saw it coming.
   Read next: The Weekly Cash Meeting
3. A 13-week cash forecast, updated weekly · 3 minLook at: Whether a week-by-week forecast of cash in and out exists, and when it was last updated.
   Good: Thirteen weeks ahead, updated every week, with last week’s forecast compared with what happened.
   Cost if wrong: You manage cash by looking at the bank balance, which tells you about the past.
   Read next: The Weekly Cash Meeting
4. The growth plan was checked against cash · 4 minLook at: This year’s revenue plan.
   Good: Someone calculated how much extra stock the plan needs, when it must be paid for, and where that cash comes from.
   Cost if wrong: You hit the revenue plan and run out of money in the same quarter.
   Read next: Profit Is an Estimate
5. Weeks of cover by product, with slow stock flagged · 4 minLook at: Your inventory report.
   Good: For every product, stock on hand and on order divided by recent weekly sales, with anything over your target flagged and owned.
   Cost if wrong: Cash sits in the products nobody’s buying while the bestsellers stock out.
   Read next: The Cash Scorecard
6. Order size is set by math, not by the minimum · 4 minLook at: Your last five POs and the supplier’s minimums.
   Good: Each order size was chosen by weighing the unit-price break against the months of stock it buys, and you’ve asked for a lower minimum at least once.
   Cost if wrong: You save 8% on the unit and tie up cash for twice as long.
   Read next: Smaller Orders, More Often
7. You’ve asked for better terms in the last year · 3 minLook at: Your supplier agreements and emails.
   Good: Deposit, balance timing and payment method were negotiated, in writing, within the last twelve months, with something offered in return.
   Cost if wrong: You’re paying a deposit set for a brand a tenth of your size.
   Read next: Supplier Terms
8. Launches and restocks are sold before they’re paid for · 4 minLook at: Your last three launches or big restocks.
   Good: At least one was sold by preorder or a waitlist, with existing customers offered first access, and the cash collected was counted against the purchase order.
   Cost if wrong: You fund every launch yourself and learn about demand after you’ve paid for the stock.
   Read next: Preorders and Waitlists
9. Preorder ship dates have a written basis, and a delay notice is ready · 3 minLook at: Your preorder product pages and your delay email.
   Good: Every stated ship date traces to a supplier confirmation, and a delay notice that offers a full refund is written and ready.
   Cost if wrong: A slipped date becomes a federal compliance problem as well as a customer one.
   Read next: The Rules on Shipping Late
10. Gift cards, store credit and prepaid plans are tracked as liabilities · 4 minLook at: Your balance sheet and your gift card and store credit reports.
    Good: The outstanding balance of each is on the balance sheet, reconciled monthly, and your accountant has set a breakage policy that allows for unclaimed property law.
    Cost if wrong: Cash you owe customers gets spent as if it were yours, and breakage gets booked that a state may claim.
    Read next: Float
11. You know how much cash your repeat customers bring in · 3 minLook at: Last quarter’s revenue by new and returning customers.
    Good: You know the returning share of revenue, and the marketing cost attached to each.
    Cost if wrong: You fund growth by buying new customers at full price while the cheapest cash you have goes unasked.
    Read next: Retention Pays in Cash
12. Financing is arranged before you need it · 4 minLook at: Your credit line, if any, and any financing offers you’ve taken.
    Good: A facility is in place and undrawn or lightly drawn, and every option you’ve used was compared on its total cost in dollars and as an annual rate.
    Cost if wrong: You borrow in a hurry, from whoever says yes, at whatever it costs.
    Read next: Borrowing Against Inventory

Score as you go; your band appears when all twelve are in.

Read your score

If you hold almost no stock, score checks 5 and 6 as 2. If you’ve never sold gift cards or store credit, score check 10 as 2 only if you decided not to.

An income statement matches each sale with the cost of its goods in the month of the sale. Your bank paid for those goods months earlier. When sales are flat, the two agree. When sales grow, they split apart.

Why profitable brands run out of cash

Say a brand sells $500,000 a month at a 60% gross margin, so the goods it sells cost $200,000 a month. Its cash is out for about 134 days from supplier deposit to payout, the cycle in the chart on page one. That means about $880,000 is always tied up in stock, deposits and payouts in flight: 134 days of $200,000 a month.

Now it plans to grow to $750,000 a month. At the same cycle, the amount tied up rises to about $1.32 million. The extra $440,000 has to be paid to suppliers before the extra sales happen. If the brand keeps 5% of revenue as operating profit, the bigger business earns $37,500 a month. It would take about a year of profit to pay for the stock the growth needs, and the stock is needed first.

Nothing is wrong with this brand. It will still run short of cash in its best year, and if it hasn’t planned for that, it will cut marketing, miss a reorder, or take whatever financing is offered that week.

Growth is bought with stock, and stock is paid for before it sells.

Neil Churchill and John Mullins made this argument in 2001 in “How Fast Can Your Company Afford to Grow?”, which opens with the observation that a company can run out of cash “even if its products are great successes” Published. Every business has a rate of growth it can fund from its own cash. Grow faster and someone else funds the difference: a lender, an investor, a supplier or a customer.

Dell learned it the hard way

Dell is the textbook example of a business its customers fund. In fiscal 1994 it wasn’t: sales reached $2.8 billion, but it lost $36 million after pushing into notebooks and retail stores Reported. Its finance chief, Tom Meredith, told strategy+business that when Dell stumbled it was “singularly focused on growth to the detriment of profitability and liquidity.” The fix was getting everyone, top to bottom, “to understand the cash conversion cycle, and how they affect it” Reported. Chapter 4 shows where that led.

What the research says

• Shin and Soenen, 1998. Using 58,985 firm-years of US company data from 1975 to 1994, they found a strong negative relation between a firm’s net trade cycle, a close cousin of the cash conversion cycle, and its profitability Published.
• Deloof, 2003. In 1,009 large Belgian non-financial firms from 1992 to 1996, gross operating income moved in the opposite direction to days receivable, days of inventory and days payable. His conclusion was that managers can raise profitability by cutting the days of receivables and inventory Published.
• Wang, 2019. From 1976 to 2015, a portfolio buying the US stocks with the shortest cash cycles and selling those with the longest earned 5% to 7% a year more than standard risk factors explained Published.

Two cautions. These are correlations in large public companies, not experiments on DTC brands: faster turns might make firms profitable, or profitable firms might just have products that sell faster. And look at the payables result. Deloof read it the sensible way round: “less profitable firms wait longer to pay their bills” Published. Stretching suppliers is a sign of trouble, not a route to profit. The gains in this research come from inventory and receivables, which for a DTC brand means stock and payouts.

How fast can you grow on your own cash?

The tool below runs the example on your numbers. Use the cycle from the tool in chapter 3; if you don’t know it yet, start with 120 days for an importer.

With the defaults, a $6 million brand planning 60% growth at a 4% operating margin and a 134-day cycle needs about $529,000 more in the cycle by year end, earns about $384,000, and ends about $145,000 short. Its own cash funds about 37% growth; cut the cycle by 30 days and that rises to about 54%, with no change to margin.

Do this

• Run the tool on this year’s plan. If it needs outside cash, write down where that comes from and when, before the next purchase order goes out.

The cash conversion cycle counts the days between paying for stock and getting paid for it: inventory days plus receivable days minus payable days. Each part looks different for a DTC brand.

The three parts, DTC version

• Inventory days. Software measures from when goods land. Measure from when you pay.
• Receivable days, which for you is payout lag. Shorter than a wholesaler’s 30 or 60 days, but not zero, and holds can stretch it.
• Payable days, which for many brands run backwards. Net-30 means paying 30 days after arrival. An importer paying a deposit at order and the balance at shipment pays months before arrival: negative payable days.

Stock on the water is stock you own. Count the cycle from the day you pay.

Payout lag, processor by processor

These are the terms processors publish for US merchants, as of September 2026. Your agreement may differ, so check your own reports.

ReportedShopify Help Center, payout timing; PayPal User Agreement, holds; Affirm Business Hub, settlements; Afterpay and Klarna US merchant pages. All read September 2026.

With buy now, pay later, the customer pays over weeks but the brand usually doesn’t wait; the provider carries the credit risk and charges a higher fee, which belongs in contribution margin (see The Whole Machine). What belongs here is holds. A reserve held for 90 days, or a 21-day hold on a new PayPal account during a launch, can matter more to your cash than any fee.

Put your cycle in one number

The tool counts the cycle from the day each payment leaves, weighting deposit and balance by their share of the order. With net terms, enter 0 for the balance before arrival and your terms after it.

With the defaults, the cycle is about 134 days: 75 on the shelf, 4 waiting for payouts, and an average of 54.5 days of paying the supplier before the goods arrive. About $917,000 is tied up at any moment, and every extra $100,000 of yearly sales ties up about $15,300 more. Each day cut from shelf time or supplier timing frees about $6,575.

Days beat rates

Founders spend hours on a loan’s rate and minutes on the cycle. On the defaults, cutting 20 days frees about $131,500; at a 12% borrowing cost, not needing that money saves about $15,800 a year. Cutting two points off the rate on a $500,000 loan saves $10,000 Derived. And the days keep paying as you grow.

Do this

• Run the tool for your top three product families from each one’s last purchase order. Then check 90 days of payout reports for the real lag, holds included.

Costco and Dell are the classic examples of businesses where somebody else pays for the inventory: Costco by selling stock faster than it pays for it, Dell by not building until the customer had ordered.

Costco: the suppliers own the shelves

Costco’s annual report says it plainly: it often sells “inventory before we are required to pay for it” Filed. Its balance sheet shows what that means.

FiledCostco Wholesale, Form 10-K for the fiscal year ended August 31, 2025, consolidated balance sheet and statement of income.

Accounts payable was 109% of inventory: Costco owed suppliers more than the value of everything in its warehouses. On average balances, inventory turned in about 28 days, payables in about 30 and receivables in about 4, a cycle of roughly two days Derived.

Two days is close to zero, not deeply negative. The negative number people quote for Costco is its operating working capital: excluding cash and investments, current assets of about $23.1 billion against current liabilities of $37.1 billion, a gap of about $14 billion Derived. Suppliers, employees’ accrued pay and members fund it; members had paid $2.85 billion of fees in advance Filed.

What a DTC brand can copy is the logic. Turn fast on a narrow range: supplier terms only fund stock that sells within them, so fewer products, deeper, is a cash decision. Charge for the relationship up front: a membership fee is cash before any product moves; for a brand that’s a prepaid plan or a gift card (chapter 8).

Dell: build it after they pay

FiledDell Inc., Form 10-Q for the quarter ended July 29, 2005 (minus 38 days at that date). Dell’s investor ratio data, not a filing, show minus 36 days in fiscal 2012.

Four days of inventory. Dell waited about a month to be paid, a sign of how much it invoiced business customers, and it still ran a cycle 37 days below zero because it paid suppliers in 73. Its annual report for that year credited its “efficient direct business model and cash conversion cycle” with operating cash flows “that typically exceed net income” Filed.

Inventory mattered to Dell because its parts lost value every week. In 1998 Michael Dell compared his 12 days of stock with a competitor’s 30 plus 40 more in retail channels: “In 58 days, the cost of materials will decline about 6 percent” Reported. Apparel ages by season and supplements by expiry date, so every shelf day costs a brand markdowns as well as cash.

Two ideas carry over. Sell before you make: build-to-order is the extreme version of a preorder, and you don’t need factories to sell a launch before the purchase order goes out (chapter 6). Make the cycle everyone’s number: the buyer should know what an extra month of stock costs, and the marketer that a launch sold in advance is cash, not just revenue.

Costco sells faster than it pays. Dell was paid before it built. Both are timing, not margin.

Do this

• Pick one idea from each. From Costco: which product families could you cut so that stock turns within your supplier terms? From Dell: which launch or restock this year could be sold before the purchase order is placed? Write both down with an owner.

Peloton sells connected bikes and treadmills and a subscription to go with them. For three years its cash flow statement showed both sides of customer funding in one company.

FiledPeloton Interactive, Form 10-K for the fiscal year ended June 30, 2022, statements of operations and cash flows. In the last three rows, positive numbers brought cash in and numbers in brackets used it.

Fiscal 2020: customers pay first

In the year to June 2020, demand ran far ahead of supply. Customers paid, then waited: deposits and deferred revenue added $272.3 million. Peloton lost $71.6 million and still brought in $376.4 million from operations Filed. That’s the Dell position.

Fiscal 2021: the backlog ships, and stock is bought for the peak

Revenue more than doubled. But the deposits turned back into products as the backlog shipped, and that line swung to minus $212.7 million, while Peloton spent $625.9 million building inventory. Operations used $239.7 million, on a net loss of only $189.0 million Filed.

Fiscal 2022: the stock outlives the demand

Then demand fell. Revenue dropped to $3.58 billion, yet inventory rose to $1.10 billion at June 30, 2022, about 140 days of the year’s cost of revenue Derived. The cash flow statement carries $224.9 million of excess and obsolete inventory reserve adjustments, up from $38.7 million Filed. Operations used $2.02 billion; Peloton took a $696.4 million term loan, raised $1.22 billion in a public offering, and in July 2022 announced a move to “third-party manufacturing partners for 100% of our products” Filed.

What to take from it

Peloton’s troubles had many causes, and it isn’t a typical DTC brand. But three lessons carry over.

• Customer deposits are temporary. They reverse as you ship. Never treat a preorder surge as a permanent source of funding.
• Buy for the demand you’ve seen. Stock bought at the peak is paid for at the peak and sold, or written down, after it. Smaller, more frequent orders (chapter 10) limit how much you’re left holding.
• Watch commitments, not just the balance sheet. Stock ordered but not delivered isn’t in inventory; it’s a payment date. Chapter 13 puts every open order on the calendar.

A preorder surge is a timing gift. Spend it as if it will reverse, because it will.

Do this

• List every open purchase order and commitment with its remaining payments and the weeks of current sales it represents. Any order over 16 weeks gets a second look this week, while it can still be cut or split.

A preorder turns the cash cycle around. The customer pays before you pay the supplier, and you learn how much to order before you commit. It’s also a loan from your customers, repaid in product, on a date you chose.

Why selling in advance works

Jinhong Xie and Steven Shugan studied advance selling in 2001, using airline seats, tickets and prepaid services. The profit from selling in advance, they found, comes less from charging different people different prices than from the buyer’s uncertainty about the future. As they later summarized it, “advance selling can increase profits simply because consumers have uncertainty about their future consumption states” Published. In their model it could almost double the profit of selling only at the time of use Published.

Three results translate to preorders:

• The advance price is usually a discount. Early buyers carry the risk of waiting, and should be paid for it.
• But not always. With limited capacity, an advance price can be a premium, because early buyers pay to be sure of getting one Published.
• Limiting advance sales can pay. Holding capacity back for later buyers at a higher price can beat selling it all early Published. That’s the case for tranches.

Their model is about services consumed later, not goods shipped later, so treat it as a guide to the logic, not a forecast.

Price tranches

A tranche is a block of units at a set price; when it sells out, the next opens higher. My rule for a launch is three:

1. Existing customers, first and cheapestA fixed number of units, offered to past buyers and your list 48 to 72 hours before anyone else, at the best price you’ll offer.
2. Everyone, at a smaller discountOpened to the public once tranche one sells or closes. Show a count of units left only if it’s true.
3. Full price, in stockThe rest of the order, at the regular price, paid for by the first two tranches.

Tranches cap how many units you sell at a discount, reward commitment in proportion to risk, and size the purchase order: if tranche one sells out in six hours, order more; if it’s open after three days, order less, before you’ve paid anyone. For how deep to discount without training customers to wait, see The First Offer.

The speed of the first tranche is the best demand forecast you’ll ever get, and it arrives before the purchase order does.

Waitlists

A waitlist collects intent without cash. Use it when you can’t yet state a ship date with confidence, then make it the list for tranche one. Count sign-ups against preorders every launch and you’ll learn what a sign-up is worth in units, which makes the next waitlist a forecast.

Why existing customers go first

Beyond fairness, it’s a risk decision. People who already own your product are the least likely to be disappointed, the most patient if the date slips, and the cheapest to reach. Selling them the first tranche saves acquisition spend for tranche two, when you know the product will ship. For who your best customers are, see The Second Order.

How late things ship

Ethan Mollick’s 2014 study of Kickstarter is the best public evidence on how often advance-sold products arrive on time. Of the successful design and technology projects he could track, “only 24.9% of projects delivered on time,” and a third hadn’t delivered when he checked; delivered projects averaged 1.28 months late. Projects funded at ten times their goal were half as likely to deliver at any given time as those funded at their goal Published. The bigger the success, the longer the wait. A 2015 study Mollick ran for Kickstarter, a survey of backers, found 9% of funded projects failed to deliver rewards Reported.

A brand with a proven supplier is far better placed than a first-time creator. But the overfunding lesson applies: a preorder that sells three times the plan will ship late, unless the tranches stop at what the supplier can make by the promised date.

Charge now, a deposit, or later

Shopify’s preorder settings let you “collect full, partial, or no payment” when the order is placed, and store the card for the rest Reported. Full payment gives the most cash and the most to refund; it suits short waits and sure dates. A deposit covers the supplier’s deposit with less exposure; it suits long waits. Nothing until shipping gives a demand signal and no cash, and some stored cards will fail.

With the defaults, 1,500 units at an average of $80 bring in $120,000 against a $36,000 purchase order, 333% of it. If the date slips and a quarter of buyers cancel, $30,000 goes back and the rest still covers the order two and a half times. The 40% chance of a slip is my placeholder, not a published rate: use your supplier’s record.

Guard the third number. Preorder cash is the customer’s until the product ships.

Do this

• Pick the next launch or big restock and plan it as three tranches, with the first offered to existing customers. Set each tranche’s size from what your supplier has confirmed it can make by the date you’ll promise, and run the tool before you open it.

The FTC’s Mail, Internet, or Telephone Order Merchandise Rule was updated in 2014 to name internet orders explicitly. It applies to anything a US customer orders from you online, and it matters most for preorders: orders you’ve been paid for and can’t yet ship.

Published16 CFR Part 435; FTC, “Business Guide to the FTC’s Mail, Internet, or Telephone Order Merchandise Rule,” edited January 2025; FTC amendments effective December 8, 2014. This is an operator’s summary as of September 2026. Have counsel review your preorder terms and notices.

What the rule requires

1. A reasonable basis for any ship date you state“Ships in March” needs a reason to believe it when you say it, such as a supplier’s confirmed production date. With no date stated, you need a reasonable basis to ship within 30 days Published. So a preorder always states a date, and you keep the evidence.
2. The clock starts at a properly completed orderThat’s when you’ve received payment and everything you need to ship Published. If you charge nothing until shipment, ask counsel how that applies before relying on it.
3. A delay notice as soon as you knowBefore the date passes, offer the choice to accept the delay or cancel for a full refund, at no cost to cancel, with a revised date or a statement that you don’t know one Published.
4. Silence counts as yes only for short delaysFor a delay of 30 days or less, no reply can count as consent if the notice says so. For a longer or indefinite delay you need express consent, or the order is treated as canceled and refunded Published.
5. Miss the revised date and you ask againA renewed notice is required, and this time silence isn’t consent Published.
6. Refunds within seven working daysSince the 2014 amendments that includes purchases on third-party credit cards; one billing cycle applies only where you are the creditor, as with a store charge card Published.

The FTC can seek civil penalties of up to $53,088 per violation, the amount set in January 2025 and still current in September 2026 Published.

Write the delay notice on the day you open the preorder. You’ll need it on a worse day.

What this means for the cash

Three things follow for the preorder tool. Refund money has to be reachable within seven working days. A slip of more than 30 days turns silent customers into cancellations unless they agree to wait, so raise the “share who cancel” input for long delays. And every notice is a chance to keep the customer: a clear date and a specific reason keep more orders than a vague apology. Customers left waiting can also dispute the charge with their card issuer, which hurts your standing with your processor.

Other countries and some US states have their own rules; have counsel review terms for each market. For setting and keeping the delivery promise itself, see the guide on delivery promises.

Do this

• Before the next preorder opens, file the supplier confirmation behind the ship date, put the date on the product page and in the confirmation email, and write the delay notice from Appendix B. Set a calendar reminder a week before the promised date to confirm it’s still true.

Warren Buffett explains float with insurance: insurers “receive premiums upfront and pay claims later,” so they hold large sums, “money we call ‘float’,” that “will eventually go to others” Reported. A DTC brand has its own float, and the same rule applies: it’s valuable when it’s cheap, and dangerous when spent as if it were yours.

What float costs

Buffett’s test is what the float costs. When premiums cover claims and expenses, “we enjoy the use of free money – and, better yet, get paid for holding it” Reported. For a brand, the cost is whatever you give up to get the cash early: the prepay discount, the gift card bonus, the cost of the program.

Say a subscriber pays $100 a month, and you offer six months prepaid at 15% off: $510 today. As financing, you’ve borrowed $410 and repay it in product over five months, giving up $90: about 7% a month, or 125% a year compounded Derived. As a loan it’s terrible. As retention it can be excellent, because it locks in renewals some customers wouldn’t have made. Judge prepaid plans on retention, as The Standing Order describes, and count the cash as a side effect.

A prepay discount is expensive money and cheap retention. Judge it as retention.

How big float gets

Starbucks is the best-known example in retail. In fiscal 2025 it added $15.2 billion to its stored value card and loyalty program balances, and at year end it held $1.75 billion of deferred revenue from them: money paid but not yet earned Filed. The mechanics are the same for a brand selling $50,000 of gift cards in December.

The four kinds of float in a DTC brand

• Prepaid plans and memberships: the most predictable float, because redemption follows a schedule.
• Gift cards: cash now, redeemed later, some never; heavily seasonal around the holidays.
• Store credit: offered instead of a refund, it keeps cash in the business, and it’s still owed. See the returns guide.
• Preorder cash: float with a delivery date and a federal rule attached.

Breakage, and why not to count on it

Breakage is the share of balances never redeemed, and it’s tempting to count as profit. Under the US revenue standard, ASC 606, a company that expects breakage recognizes it gradually, in proportion to redemptions, and only to the extent a significant reversal isn’t likely; otherwise it waits until redemption becomes remote. Any amount it must hand to a state under unclaimed property law is a liability, not revenue Published. Have your accountant set the policy.

That last point is where brands get caught, and gift cards carry their own rules too.

• Federal rules. Under the 2009 CARD Act rules in Regulation E, a gift card’s funds can’t expire earlier than five years after it was issued or last loaded. Dormancy fees are allowed only after 12 months without activity, at most monthly, and disclosed. Promotional and loyalty cards are excluded Published.
• California, as one example. It’s unlawful to sell a gift certificate with an expiration date or a service fee, and since April 1, 2026, balances under $15 (previously $10) must be paid out in cash on request. Gift certificates covered by those rules are exempt from the state’s unclaimed property law, but any gift certificate with an expiration date is not Published.
• Everywhere else. States differ on whether unredeemed balances must be handed over. Have counsel review before you book any breakage.

Don’t spend it twice

In the 13-week forecast, every float balance appears as a liability with a redemption schedule. December’s gift card sales are January’s orders, shipped from stock you’ll have to buy. Spend the float on January ads and you have two months of revenue and one month of cash.

Do this

• Pull the outstanding balance of every kind of float you hold, and put each in the cash forecast with its expected redemption month. Ask your accountant, in writing, what your breakage policy is and how it allows for unclaimed property law.

Margin and payback for acquisition and retention belong in The Whole Machine. This chapter looks at the same customers through the bank account, where the difference is starker.

Two orders, two cash stories

Say a brand sells a $70 order whose goods cost $28, bought months ago. To win a new customer it spends $60 on ads, paid to the platform in the days before and around the order. To win a repeat order from an existing customer it sends an email and a text that cost it a dollar or two.

The new customer’s order uses $18 of cash. The repeat order leaves $40, enough to buy the goods for another order and a half. Shipping and fees make both columns worse, but the gap stays. A brand growing through new customers is spending cash to grow; one growing through repeat customers is being paid to grow.

A repeat order is the cheapest cash a brand can raise. Nobody has to approve it, and it comes with a customer.

Three ways retention shortens the cycle

• It funds the stock. The $40 above pays for the next purchase order.
• It makes demand predictable. Repeat buyers reorder on a rhythm, which lets you order smaller and more often (chapter 10). Reorder timing is covered in The Second Order.
• It fills the first tranche of every preorder in chapter 6.

What to measure

Split last quarter’s order cash by new and returning customers, with the marketing cash spent on each beside it. The query is in Appendix A.

Do this

• Build the two-column table above with your own numbers for last quarter. If the new-customer column is negative, growth needs cash in proportion to how fast you acquire, and the tool in chapter 2 understates it.

Shelf days are usually the biggest piece of a DTC brand’s cycle, and they’re driven by how much you buy at once. Order six months of stock and the average unit sits for three. The supplier’s price break pulls the other way.

The oldest formula in inventory

In 1913 an engineer named Ford Harris published “How Many Parts to Make at Once,” the first statement of what became the economic order quantity Published. It balances the fixed cost of each order against the cost of carrying each unit. Most brands understate the carrying cost by counting only warehouse fees. It also includes what the cash could have done instead, plus markdowns and write-offs on stock that aged. My planning figure is 30% of unit cost per year unless you’ve measured your own, higher for fashion and anything with a date on it.

When the price break is worth it

Say a product sells 1,000 units a month. The supplier quotes $10.00 a unit at a 6,000-unit minimum, or $10.80 at 2,000.

On these numbers the big order wins, narrowly: it saves $4,800 on the unit price and costs $2,880 more to carry. But the smaller orders free about $19,200 of cash on average, and if demand falls after the first two months, the big order leaves you holding four months of stock at a lower sales rate while the small ones let you stop. Peloton’s inventory in chapter 5 is what that risk looks like at scale.

There’s a quick rule for any price break. Take the bigger order only if its discount is larger than your yearly carrying cost times the difference in months of stock between the two orders, divided by 24. Here: 30% times (6 minus 2) divided by 24 is 5%. The discount is 7.4%, so the big order passes, if your demand is steady and the product doesn’t age. At a 45% carrying cost the break-even is 7.5% and it’s a coin toss Derived.

A minimum order quantity is a price. Pay it only when the discount beats what the cash and the risk of unsold stock cost you.

Get the price without the quantity

The best answer is often neither order. Ask for the 6,000-unit price on a 6,000-unit commitment, shipped in three releases of 2,000, each paid when it ships. The supplier gets volume and planning certainty; you get the price and a third of the stock at a time. Other ways to buy less at once:

• Split the minimum across variants. 2,000 per style is different from 2,000 across five colors. Ask which you’re quoting.
• Hold components, not finished goods. Bottles and labels in bulk; fill in smaller runs.
• Fast freight for fast sellers. A small air top-up can save a stockout and a bigger ocean order.
• Cut the tail. Every minimum met on a slow product is months of cash. That’s the Costco lesson from chapter 4.

Smaller orders need reliable lead times and a forecast updated weekly, or they become stockouts.

Do this

• For your next three purchase orders, write down the months of stock each buys and run the price-break rule against the next smaller option. Then ask each supplier for the larger order’s price on scheduled releases. The worst answer is no.

In the example on page one, cash leaves an average of 54.5 days before the goods arrive. Terms are negotiable, and most brands accept whatever they were quoted when they were small and never ask again.

What to ask for, in order of value

1. A smaller depositMoving from 30% to 20% on a deposit paid 100 days before arrival, with the balance still paid at shipment, cuts 6.5 days from the weighted cycle in the tool in chapter 3. Offer to pay the deposit on materials only.
2. Balance on arrival instead of at shipmentMoves 70% of the order by the transit time: 24.5 days off the cycle on the defaults.
3. Net terms after arrivalNet 30 from arrival, the goal for an established relationship, cuts 45.5 days on the defaults.
4. Scheduled releases on a volume commitmentFrom the last chapter: the bigger order’s price, delivered and paid in parts.
5. Consignment on slow moversThe supplier owns stock in your warehouse until it sells. Rare, but free to ask.

DerivedFrom the cycle tool’s defaults: 30% deposit 100 days before arrival, 70% balance 35 days before arrival.

What to offer in return

A supplier gives better terms to a customer who makes its life predictable: a rolling six-month forecast with the next two months firm, a record of paying on the due date, a volume commitment with releases, or a second product line.

When to pay early

Terms work in both directions. Costco’s filing says it sells inventory before it has to pay “even while taking advantage of early payment discounts” Filed. A common early-payment offer is 2% off for paying in 10 days instead of 30. Giving up 2% to keep your cash 20 more days is equivalent to borrowing at about 37% a year Derived. If you have the cash, take the discount. If you’d have to borrow to take it, compare the rate.

Don’t stretch

Remember the payables result from chapter 2: Deloof found that less profitable firms paid their bills later, not that paying later made firms profitable Published. Paying late without agreement is borrowing without asking. It costs you production priority, the next negotiation, and sometimes the supplier.

Negotiate the terms. Then pay on the day, every time. That record is the next negotiation.

Do this

• Send the terms request in Appendix B to your two largest suppliers this month, with a rolling forecast attached. Ask for one change each, the highest on the list above that you think they’d grant, and offer something from the second list in return.

Sometimes a shorter cycle and customer funding aren’t enough: a seasonal build, a big retail order, a plan the tool in chapter 2 says your cash can’t fund. This chapter describes the main options without recommending any; the right one depends on your business, and an adviser who knows it should help you choose. None of this is financial advice.

The options

Shopify Capital is a common example of the sales-linked kind. Shopify describes it as offering “merchant cash advances and loans,” repaid with “a fixed percentage of your store’s daily sales, but only on days you make sales,” with “no compounding interest”; loans in the US are issued by WebBank Reported. Repayments fall when sales fall, which is a real convenience. The fee still has an annual rate.

One way to compare them all

Put every option into two numbers: the total dollars you’ll pay beyond what you borrow, and that cost as an annual rate, given how quickly you’ll repay. A fixed fee looks small until you annualize it.

Say you take $100,000 with a $10,000 fee, repaid in equal monthly amounts over six months. Your average balance is a little under $60,000, for half a year, so the $10,000 is roughly 34% a year. Repay the same fee over three months, because sales went well, and it’s about 59% Derived. That doesn’t make it wrong; money that funds a sold-out launch can be worth 59%. Know the number before you sign.

Every fee has an annual rate. Work it out before you sign, not after.

Borrow before you need it

Arrange a line of credit when your forecast says you won’t need it: terms are better and you have time to compare. A brand that arranges financing in the week it runs short takes whatever is offered. The 13-week forecast in the next chapter is also the first thing a good lender will ask to see.

Do this

• List every financing arrangement you have or have been offered, with its total cost in dollars and as an annual rate. If you have no line and your plan needs outside cash, start that conversation this quarter.

A monthly close tells you what happened to cash three to six weeks ago. A purchase order balance, a slow payout week and a tax payment can land together in the gap. The weekly meeting exists to see that week coming while there’s still time to move something.

The 13-week forecast

Thirteen weeks is long enough to see the next purchase order’s balance and short enough to forecast week by week. It’s built from cash, not the income statement.

• Cash in: payouts, from forecast sales shifted by each processor’s lag; preorder and gift card cash; financing drawn.
• Cash out: every PO deposit and balance on its due date; freight and duties; payroll; ad spend; fixed costs; taxes; loan repayments; refunds.
• The floor: the lowest balance you’ll allow. My rule is four weeks of fixed costs plus any preorder cash held for refunds.

That picture, seen in week one, gives you seven weeks to deal with week eight. Split the purchase order whose balance lands then, move its balance date, open a preorder that brings cash in before it, or draw on a line arranged in advance. Seen in week eight, it gives you none of those.

The bank balance tells you about the past. The forecast tells you about the week you can still change.

The agenda

1. Where we are · 5 minCash by account, funds pending or held, credit drawn.
2. What changed · 5 minLast week’s forecast against actual. Anything off by 10% or more gets a reason.
3. The next 13 weeks · 10 minThe lowest week and its gap to the floor. New commitments.
4. Decisions · 10 minOrders to place, split or delay. Preorders to open. Spend to move. Each gets an owner and a date.

Three rules keep it honest. One person owns the forecast. Last week’s version is saved, never overwritten. And the meeting happens when things are good, because that’s when the habit is built.

Do this

• Build the first 13-week forecast this week, from the layout in Appendix B, even if half the lines are estimates. Book a recurring 30-minute meeting and hold the first one before the forecast is perfect. It gets accurate by being used.

The forecast shows where cash is going. The scorecard shows why. One page, on screen right after the forecast.

A cash number without its date is a guess about the past.

Two rules for the page

First, no revenue figure appears on it; when revenue sits next to cash, the meeting talks about revenue. Second, every float number sits next to the cash it’s owed from. An $80,000 gift card balance means one thing with $400,000 in the bank and another with $120,000.

Reading it

Read weeks of cover with open commitments: 10 weeks on hand and 30 on order is a problem even if today looks fine. And read forecast accuracy first. If it’s off by more than 10% most weeks, fix the forecast before deciding anything from it.

Do this

• Build the page this week with whatever you can pull, blanks included. Put a name next to each blank. The queries for weeks of cover, float and repeat share are in Appendix A; payout lag comes from your processors’ payout reports.

The order of work is the same whether you’ve just decided to take cash seriously or inherited a brand short of it. See the quarter, measure the cycle, shorten the supply side, and only then sell in advance: a preorder program without a forecast is a new way to run out of cash.

1. Week one: see itPull every bank balance and 90 days of payout reports. List every open purchase order with its remaining payments and dates. Build the first 13-week forecast and set the floor (chapter 13). Hold the first weekly meeting on Friday, however rough the forecast.
2. Week two: measure itRun the cycle tool for your top three product families (chapter 3) and the growth tool on this year’s plan (chapter 2). Pull the outstanding balance of every kind of float and ask your accountant, in writing, about breakage and unclaimed property (chapter 8). Split last quarter’s cash by new and returning customers (chapter 9).
3. Week three: the supply sideRun the price-break rule on the next three purchase orders, and ask for the bigger order’s price on scheduled releases (chapter 10). Send the terms request to your two largest suppliers (chapter 11). Flag every product over 26 weeks of cover and decide what happens to it.
4. Week four: customers fund itPlan the next launch or restock as three tranches with existing customers first, run the preorder tool, and write the delay notice before it opens (chapter 6, chapter 7). Put the scorecard beside the forecast (chapter 14). If the growth tool said you need outside cash, start the financing conversation now (chapter 12).

At day thirty the cycle won’t be shorter yet; orders and terms take a quarter to flow through. You’ll have the next thirteen weeks in view, a number for the cycle, and a plan for who pays for the next round of growth.

See the quarter, then shorten the cycle, then let customers fund it. In that order.

Do this

• Put the four weeks on the calendar today, with an owner for each line. Score the audit in chapter 1 again at day ninety.

Whoever runs cash, a new finance lead, a fractional controller, or you, needs six things on day one. Without them, the first month goes on finding out what the business owes and when.

1. Access to every accountBank, card, processor and marketplace accounts, read-only at least, with balances, pending funds and any holds or reserves.
2. The purchase order bookEvery open order with its supplier, amount, deposit, balance, due dates and expected arrival.
3. Inventory by product, at costOn hand, in transit and on order, with the last four weeks of unit sales beside it.
4. Everything the business owes customersGift card, store credit, prepaid plan and unshipped preorder balances, and the breakage policy if there is one.
5. The fixed calendarPayroll dates, rent, software, tax deadlines and loan payments for the next quarter.
6. Every financing agreementLines, loans and advances, with limits, rates or fees, repayment terms and covenants.

Do this

• Ask for all six in one message today. Whatever takes longest to arrive is where the business is most exposed.

• The Customer-Funded BusinessJohn Mullins, 2014The case for growing a company on customers’ cash. Part two of this guide is the DTC version.
• Getting to Plan BJohn Mullins and Randy Komisar, 2009On testing a business model, with working capital treated as part of the model, not an afterthought.
• How Fast Can Your Company Afford to Grow?Neil Churchill and John Mullins, Harvard Business Review, 2001The short article behind chapter 2: every business has a growth rate its own cash can fund, and the levers that change it are timing as much as margin.
• Direct from DellMichael Dell with Catherine Fredman, 1999The founder’s account of a business customers paid for before it bought the parts.
• Financial IntelligenceKaren Berman and Joe Knight, with John Case, 2006A plain-language guide to why profit and cash differ, for managers who aren’t accountants.
• Berkshire Hathaway shareholder lettersWarren Buffett, annual letters from 1965The best explanation of float, and why it’s only cheap if you don’t lose money getting it.

And the research: Shin and Soenen (1998), Deloof (2003) and Wang (2019) on the cash cycle and profitability; Xie and Shugan (2001) on advance selling; Mollick (2014) on crowdfunding and late delivery; Harris (1913) on order quantity. The filings: Costco’s 2025 Form 10-K, Dell’s 2005 Form 10-Q, Peloton’s 2022 Form 10-K and Starbucks’ 2025 Form 10-K. Full references are in Appendix C.

Andrew Lauchner runs Growth Legend, embedding inside consumer brands to own lifecycle, email and SMS, and revenue operations. He is the author of The Second Order, on turning first-time buyers into second-time buyers, and The Whole Machine, on the fundamentals of DTC growth, along with a series of field guides for DTC operators at andrewlauchner.com.

As Senior Director of Growth and Retention Marketing at Gallery Furniture, he rebuilt the customer journey and the sales playbooks together. He has worked on growth and retention at Binance and 3Commas, and has been Head of Growth and Retention at Greatness Wins and at Nexus Agriscience.

Andrew answers every note from operators working on this, including those looking for someone to own it. Write to andrew@growthlegend.com or message him on LinkedIn.

The formulas

Weeks of cover by product

-- stock on hand and on order, over average weekly units sold (last 28 days)
WITH sold AS (
  SELECT ol.sku, SUM(ol.quantity) / 4.0 AS units_per_week
  FROM order_lines ol
  JOIN orders o ON o.id = ol.order_id
  WHERE o.created_at >= CURRENT_DATE - INTERVAL '28 days'
    AND o.cancelled_at IS NULL
  GROUP BY ol.sku
), stock AS (
  SELECT sku, SUM(on_hand) AS on_hand
  FROM inventory_levels
  WHERE snapshot_date = CURRENT_DATE
  GROUP BY sku
), open_po AS (
  SELECT sku, SUM(quantity_ordered - quantity_received) AS on_order
  FROM purchase_order_lines
  WHERE status = 'open'
  GROUP BY sku
)
SELECT s.sku,
       s.on_hand,
       COALESCE(p.on_order, 0)                                   AS on_order,
       ROUND(COALESCE(d.units_per_week, 0), 1)                   AS units_per_week,
       (s.on_hand + COALESCE(p.on_order, 0))
         / NULLIF(d.units_per_week, 0)                           AS weeks_of_cover
FROM stock s
LEFT JOIN open_po p ON p.sku = s.sku
LEFT JOIN sold d    ON d.sku = s.sku
ORDER BY weeks_of_cover DESC NULLS FIRST;

Null means no sales in four weeks: the slowest stock you have, listed first.

Float owed

-- what the business owes customers today
SELECT 'gift cards'   AS kind, SUM(balance) AS owed
FROM gift_cards WHERE disabled_at IS NULL
UNION ALL
SELECT 'store credit', SUM(balance)
FROM store_credit_accounts
UNION ALL
SELECT 'unshipped preorders', SUM(o.total_price - COALESCE(r.refunded, 0))
FROM orders o
LEFT JOIN (SELECT order_id, SUM(amount) AS refunded FROM refunds GROUP BY order_id) r
  ON r.order_id = o.id
WHERE o.tags LIKE '%preorder%'
  AND o.cancelled_at IS NULL
  AND NOT EXISTS (SELECT 1 FROM fulfillments f WHERE f.order_id = o.id);

Add prepaid plan balances from your subscription app.

Repeat share of cash

-- order cash from new and returning customers, last 13 weeks
WITH first_order AS (
  SELECT customer_id, MIN(created_at) AS first_at
  FROM orders WHERE cancelled_at IS NULL
  GROUP BY customer_id
)
SELECT DATE_TRUNC('week', o.created_at)                              AS week,
       SUM(o.total_price) FILTER (WHERE o.created_at = f.first_at)   AS new_cash,
       SUM(o.total_price) FILTER (WHERE o.created_at > f.first_at)   AS repeat_cash,
       SUM(o.total_price) FILTER (WHERE o.created_at > f.first_at)
         / NULLIF(SUM(o.total_price), 0)                             AS repeat_share
FROM orders o
JOIN first_order f ON f.customer_id = o.customer_id
WHERE o.created_at >= CURRENT_DATE - INTERVAL '13 weeks'
  AND o.cancelled_at IS NULL
GROUP BY 1 ORDER BY 1;

Add each week’s acquisition and retention spend for the table in chapter 9. Postgres syntax.

The 13-week forecast

                         WK 1   WK 2   WK 3  ...  WK 13
OPENING CASH
CASH IN
  Payouts: Shopify Payments   (forecast sales, shifted by lag)
  Payouts: PayPal
  Payouts: BNPL providers
  Preorder and gift card cash
  Wholesale receipts
  Financing drawn
CASH OUT
  PO deposits                 (one line per open PO)
  PO balances                 (one line per open PO)
  Freight and duties
  Payroll
  Ad spend                    (on each platform's billing schedule)
  3PL, software, rent
  Sales tax, income tax
  Loan and advance repayments
  Refunds, incl. preorders
CLOSING CASH
FLOOR                         (4 weeks of fixed costs + preorder reserve)
ABOVE / BELOW FLOOR
LAST WEEK'S FORECAST FOR THIS WEEK, AND THE DIFFERENCE

Asking a supplier for better terms

SUBJECT   Forecast for the Next Six Months, and a Request on Terms

Hi [name],

Attached is our rolling six-month forecast for [products]. The
next two months are firm; the rest is our best estimate, and
we'll update it on the first of each month.

We've grown [x]% with you over the last [period] and paid every
invoice on its due date. As we plan the next year, we'd like to
ask for one change: [balance paid on arrival rather than at
shipment / a 20% deposit instead of 30% / net 30 from arrival /
the 6,000-unit price on a 6,000-unit commitment, released and
paid in three lots of 2,000].

In return we can offer [a 12-month volume commitment of x units
/ the monthly forecast / confirming materials earlier /
consolidating [product] with you].

Could we talk this week or next?

[name]

This is a business letter to a supplier, not marketing, so it doesn’t need an unsubscribe line.

Preorder product page

PREORDER: SHIPS BY [DATE]
You'll be charged [in full / a $[x] deposit] today[, and the
balance when your order ships]. We expect to ship by [date]. If
that changes, we'll email you before then with a new date, and
you can cancel for a full refund at any time before it ships.
Orders with in-stock items ship [together when the preorder
ships / separately].

State only a date your supplier has confirmed in writing (chapter 7). Have counsel review.

First access for existing customers: email

SUBJECT   You're First: [Product] Preorders Open Today
PREVIEW   48 hours before anyone else, at the best price we'll offer

[First name], [product] is coming in [month], and you get first
access.

For the next 48 hours, preorders are open only to customers, at
$[price], the lowest price it will ever launch at. There are
[number] at this price. After that, it opens to everyone at
$[price 2].

It ships by [date]. You'll be charged [today / a deposit today],
and if the date changes we'll tell you before it does, with the
option of a full refund.

[Preorder now]

[Brand] · [postal address]
You're receiving this because you bought from us.
Unsubscribe: [link]

First access for existing customers: text

[Brand]: [First name], [product] preorders are open to customers
only for 48 hrs, at $[price] (the lowest it'll ever be). Ships by
[date]. [link] Reply STOP to opt out

Send only to customers who’ve given SMS consent, within quiet hours for their time zone.

The delay notice

SUBJECT   An Update on Your [Product] Preorder, Order #[number]
PREVIEW   new ship date, and your options

Hi [first name],

We promised to ship your [product] by [original date]. We won't
make that date, because [honest, specific reason].

Our new ship date is [revised date]. [OR: We don't yet know the
new date. We'll write again by [date] with an update.]

You have two options:

1. Wait for it. [IF THE NEW DATE IS 30 DAYS OR LESS AFTER THE
   ORIGINAL: If we don't hear from you, we'll take that as a yes
   and ship by [revised date].] [IF MORE THAN 30 DAYS OR NO DATE:
   Please click below to confirm you'd like to wait. If we don't
   hear from you by [date], we'll cancel and refund your order.]
   [Keep my order]

2. Cancel for a full refund, at no cost. [Cancel and refund]
   Refunds go back to your original payment method within seven
   working days.

We're sorry. Thank you for waiting with us.

[name], [Brand]

A required notice under the FTC rule, sent before the original date passes. Keep promotion out of it, and have counsel review the wording.

The cash cycle and profitability (chapter 2)

• Hyun-Han Shin and Luc Soenen. “Efficiency of Working Capital Management and Corporate Profitability.” Financial Practice and Education 8(2), 1998, 37–45. Sample and finding as summarized in Shahid Ali, “Working Capital Management and the Profitability of the Manufacturing Sector: A Case Study of Pakistan’s Textile Industry,” Lahore Journal of Economics 16(2), 2011, 141–178, and in Wang (2019) below.
• Marc Deloof. “Does Working Capital Management Affect Profitability of Belgian Firms?” Journal of Business Finance and Accounting 30(3–4), 2003, 573–588.
• Baolian Wang. “The Cash Conversion Cycle Spread.” Journal of Financial Economics 133(2), 2019, 472–497. Working paper version.
• Neil C. Churchill and John W. Mullins. “How Fast Can Your Company Afford to Grow?” Harvard Business Review, May 2001.
• Lawrence M. Fisher. “Inside Dell Computer Corporation: Managing Working Capital.” strategy+business, January 1998.

Payouts (chapter 3)

• Shopify Help Center. Shopify Payments payout timing.
• PayPal. User Agreement, section on holds.
• Affirm Business Hub. Understanding settlements.
• Afterpay. For retailers. Klarna, Klarna for business.

Company filings (chapters 4, 5, 8, 11)

• Costco Wholesale Corporation. Form 10-K for the fiscal year ended August 31, 2025; consolidated balance sheets.
• Dell Inc. Form 10-Q for the quarter ended July 29, 2005; Form 10-K for fiscal 2005; selected financial data and ratios, fiscal 2010 to 2013.
• Peloton Interactive. Form 10-K for the fiscal year ended June 30, 2022; balance sheets, operations, cash flows.
• Starbucks Corporation. Form 10-K for the fiscal year ended September 28, 2025; deferred revenue details.

Preorders and the rules (chapters 6, 7)

• Jinhong Xie and Steven M. Shugan. “Electronic Tickets, Smart Cards, and Online Prepayments: When and How to Advance Sell.” Marketing Science 20(3), 2001, 219–243.
• Jinhong Xie and Steven M. Shugan. “Advance Selling Theory.” In Vithala R. Rao, ed., Handbook of Pricing Research in Marketing, Edward Elgar, 2009.
• Ethan Mollick. “The Dynamics of Crowdfunding: An Exploratory Study.” Journal of Business Venturing 29(1), 2014, 1–16.
• Kickstarter. Fulfillment report, study by Ethan Mollick, 2015.
• Shopify Help Center. Pre-orders.
• 16 CFR Part 435, Mail, Internet, or Telephone Order Merchandise. Federal Trade Commission, Business Guide to the FTC’s Mail, Internet, or Telephone Order Merchandise Rule, edited January 2025; final amendments, September 2014.
• 16 CFR 1.98, adjustment of civil monetary penalty amounts, as amended January 17, 2025.

Float (chapter 8)

• Warren E. Buffett. Letter to Berkshire Hathaway shareholders, February 2020.
• 12 CFR 1005.20, requirements for gift cards and gift certificates (Regulation E).
• California Civil Code § 1749.5, as amended by SB 22 (Stats. 2025, ch. 207), version operative April 1, 2026, and Code of Civil Procedure § 1520.5.
• FASB Accounting Standards Codification 606-10-55-46 to 55-49, customers’ unexercised rights.

Supply and financing (chapters 10 to 12)

• Ford W. Harris. “How Many Parts to Make at Once.” Factory, The Magazine of Management 10, 1913, 135–136, 152. Donald Erlenkotter, “Ford Whitman Harris and the Economic Order Quantity Model,” Operations Research 38(6), 1990.
• Shopify. Shopify Capital; Shopify Help Center, Shopify Capital.