Paper profit does not pay suppliers, cover freight, or keep a shop running when sales slow for a week. Many sellers import in volume to unlock better wholesale pricing, then find themselves sitting on a pile of stock with an almost empty account. This is about understanding the cash conversion cycle in cross-border importing and timing your purchase orders so you never end up there.
Why a profitable shop can still run out of cash
The answer is simple once you see it: profit is an accounting concept, and cash flow is an operational reality. They do not move at the same speed.
When you place an order on 1688, cash goes out immediately. A deposit to the factory, typically 30 to 50 percent of the order value. The balance before goods leave the warehouse. Freight paid upfront or on arrival. All of that happens before you sell a single unit.
Then goods spend roughly 18 to 30 days in transit by sea freight, plus a few days for customs clearance and delivery to your warehouse. Then stock sits waiting to sell. Then you sell, and the platform holds settlement for 7 to 15 days before transferring to your account. Total elapsed time from cash out to cash back in can run 45 to 70 days or longer, depending on how quickly the product turns.
During that window, if the next order needs to go out to avoid a stockout, more cash leaves again. When the rate of cash out consistently exceeds the rate of cash in, the account drains, even while the P&L shows green.
The cash conversion cycle: what to measure
One concept makes this concrete: the cash conversion cycle. It measures the gap between when you spend cash and when selling cash returns to you.
It has three parts:
- Days in inventory: from when stock arrives to when it is sold. If you bring in 300 units and move an average of 30 per day, inventory sits about 10 days. Slower velocity stretches this fast.
- Days the platform holds settlement: varies by platform, typically 7 to 15 days after an order is completed.
- Import lead time: from order placement to stock in your warehouse in Vietnam, including production or packing at the factory, domestic China shipping to the consolidation warehouse, sea freight (roughly 18 to 30 days), customs clearance, and final delivery. Total lead time on sea routes usually falls between 25 and 40 days depending on the route and season.
Add those three together and you have your real cycle length. That is how many days cash is locked in inventory and receivables before it comes back. Importing in higher volume raises the dollar value trapped inside that cycle.
The bulk-order trap
The logic sounds reasonable: larger orders get a better unit price and lower per-unit freight cost. On a cost-per-unit basis, that is correct. On a cash-flow basis, it is a trap.
Concentrating your entire working capital into one large order means betting that stock will sell at the pace you projected, with no customs delays, no defective batch to resolve, no slow week. If any one of those happens, you have no capital to operate while waiting for money to come back.
Splitting into multiple smaller orders costs slightly more per unit, but it returns cash more steadily. Specific advantages:
- Revenue arrives in smaller, more regular batches instead of one large settlement after 60 days.
- You can adjust quantities if the product sells differently than expected, without being stuck holding six months of stock.
- Concentrated risk per batch drops, so a quality issue with one order does not wipe out a season's worth of capital.
For most mid-sized shops, running two or three staggered orders in rotation controls cash flow better than one massive order twice a year.
Timing orders around actual cash flow
The right moment to place the next order is not when stock is about to run out. It is when the cash expected from the current batch is sufficient to fund the next deposit.
Three numbers make this workable:
- Expected stock-out date: current inventory divided by average daily sell-through.
- Inbound lead time: based on your actual historical experience, not what the supplier promises.
- Platform settlement date: when the platform is scheduled to transfer the revenue already earned.
With those three numbers, you work backward. If stock runs out in 16 days and sea freight takes 30 days, the next order needs to be placed at least 30 days before the stockout, meaning you should be placing it now, on the day the current batch arrives. Then check whether the settlement from the current batch arrives before the deposit on the next order is due.
No complex spreadsheet required. A running note with those three numbers per SKU, updated each time you place an order, is enough to avoid surprises.
Keep a cash buffer that actually covers your real exposure
Even a well-planned schedule cannot anticipate everything. A batch held at customs for an extra week. A defect rate that generates a wave of returns. A platform that settles slower during a public holiday period. These are not rare edge cases. They all delay inbound cash.
A cash buffer addresses this. The amount depends on your scale, but a practical floor: keep enough to cover fixed operating costs (warehouse rent, any staff, platform fees) for at least 4 to 6 weeks, independent of sales revenue coming in.
This is not idle money. It is the cushion that lets you avoid fire-selling stock just to raise emergency cash, and stops you from being forced to pause restocking exactly when a product is performing well.
Track cash weekly, not monthly
A monthly P&L can look fine while a specific week inside that month is severely cash-negative: for example, a week when a new deposit goes out and settlement from the previous batch has not yet arrived.
Weekly tracking surfaces that gap early enough to do something. If you see next week will require a 30 million VND deposit but the settlement from the current batch has not landed yet, you have time to delay the order a few days or negotiate a slightly later deposit with the supplier. Discovering the problem after the order is already placed removes all options.
Simple tracking: each week, note expected cash out (deposits, balance payments, freight) and expected cash in (platform settlements). Two columns. That is enough to see which weeks are exposed.
Buffer should scale with order size
As volume grows, every number scales up: larger deposits, higher freight, more value sitting in inventory. The buffer does not always scale with it.
A warning sign: the ratio of your cash buffer to the total value of in-transit and on-hand inventory shrinks as you expand. Holding 5 million VND in reserve against a 20 million VND order (25 percent) is reasonable. Holding 5 million VND against a 200 million VND order is not. The buffer should grow roughly in proportion to inventory value, not stay at a fixed absolute number.
There is no universal ratio because it depends on your category, sell-through speed, and how much volatility you face. But if placing a new order reliably produces a few days of anxiety, that is usually a sign the buffer is thin.
Bottom line
Cash flow management for volume importing is not technically complex, but it requires consistent discipline. Know your cash conversion cycle. Time orders around real cash flow rather than gut feel about stock levels. Split batches rather than concentrating all capital in one large order. Keep a buffer sized to absorb the surprises that will come. None of those things fix a bad product, but they keep a shop from failing for the wrong reason: running out of cash while turning a profit.