The Amazon seller’s paradox: profitable on paper, but short of cash to restock. Cash flow needs managing just as much as margin.
The Amazon cash cycle
Amazon pays out funds with a delay (often every 14 days, with a reserve). Between buying inventory and getting paid, your cash is tied up.
The calculation that saves you
Available cash + expected payouts − required restocks − fixed costs = room to maneuver. If it is negative, you are heading for a wall even while being profitable.
Planning restocks
- Estimate the sales velocity of each product
- Anticipate supplier + shipping lead times
- Keep a buffer for peaks (Q4)
Avoiding the downward spiral
A stockout = lost BSR = falling sales = cash flow that tightens even further. It is better to manage cash upstream. Profit+ projects your cash flow from your sales and your real fees.