The Inventory Balancing Act

Inventory planning can make or break a scaling DTC Brand’s profit and cash flow.

Stock out, and you lose revenue and customer trust.

Overstock, and your cash is tied up in slow-moving inventory.

Neither is a good option.

Here are a few best practices that can help your DTC brand reduce stockouts and increase cash flow:

🔹 Create a formal demand forecasting process – Analyze historical sales data, seasonality, and trends to predict demand more accurately and avoid surprises.

🔹 Dial in your reorder points – Set optimal reorder points and safety stock levels so you’re never scrambling to restock or sitting on too much inventory.

🔹 Protect subscription products – If you offer subscriptions, segment that inventory separately and build a forecasting model that prioritizes recurring orders. Running out of subscription products can kill retention and brand loyalty.

🔹 Improve supplier relationships – Reliable suppliers with consistent lead times help you avoid unexpected delays and keep inventory flowing.

🔹 Free up cash with inventory financing – If capital is tight, consider financing options that align with your cash conversion cycle rather than draining cash reserves upfront.

Smart inventory planning helps increase profit and cash flow as you scale.

Want to take your brand's inventory planning to the next level?

An expert DTC Fractional CFO from Free to Grow CFO can help you build a strategy that balances cash flow and stock levels, so you can scale with confidence.