Why a profitable ecommerce campaign can still cause a replenishment cash gap

Put cash movements on a timeline

For the next purchase, separate at least five items:

1. Available cash: verify spendable bank and payment-account balances. An undrawn credit facility, unsettled platform balance or restricted funds are not cash already available.
2. Platform payouts: use settlement records and actual terms to estimate arrival dates. Show settled, unsettled, held and deposit balances separately; an estimate is not a payout guarantee.
3. Refunds and after-sales: distinguish refunds already deducted from expected payouts from those requiring a separate payment, so the same amount is not deducted twice.
4. Stock payments: list deposits, balances, due dates, payment methods and related delivery conditions. Do not assume a supplier has agreed to a later payment until confirmed.
5. Other commitments: include payroll, rent, logistics, taxes and other actual payments due, as well as any necessary minimum cash buffer.

The aim is to identify the lowest available balance on a particular day, not merely the balance at month end. Label uncertain payout dates, refunds and commitments as assumptions and update them; a forecast is not money received.

A simplified profitable campaign with a payment-day gap

Assume a campaign is finished. Net sales are RMB 200,000, the cost of goods sold is RMB 100,000 and related expenses are RMB 75,000, leaving RMB 25,000 pretax profit. Sales and costs use the same VAT-exclusive basis; goods and related expenses were paid before the forecast begins. The example excludes other profit or loss items and cannot determine income tax or prove a real company's profitability.

At the start of the forecast, available cash is RMB 40,000. Assume the RMB 200,000 sales proceeds are still held by the platform, with no further fee deductions: RMB 80,000 is expected on day 2, RMB 100,000 on day 8, and RMB 20,000 remains restricted through the end of day 8. The refund below relates to different older orders and has not been deducted from either payout. The new inventory payment and refund do not overlap. Assume no other cash movements or borrowing for this illustration.

On day 5, 40,000 + 80,000 − 15,000 − 130,000 = RMB -25,000. The negative figure means the original plan is short RMB 25,000 on that day; it does not mean the business can actually pay and hold a negative cash balance. The day 8 figure also assumes the gap was first addressed and the payout arrived as expected. If the company wants a minimum RMB 10,000 buffer, it must arrange another RMB 35,000 before payment. That figure is neither a profit loss nor necessarily the amount of long-term finance needed.

Compare possible adjustments

• Confirm payouts: check dates, reasons for restrictions and release conditions. Do not count held funds as spendable without confirmation.
• Discuss supplier terms: if the supplier agrees and other conditions remain unchanged, the RMB 130,000 might be split into RMB 50,000 on day 5 and RMB 80,000 after the day 8 payout. In this example the balance stays positive, but verify whether delivery timing, price or other terms change.
• Change the stock plan: compare staged purchases against current inventory, expected sales, lead times and stockout risks. A smaller immediate payment may ease cash pressure but can affect sales or freight costs.
• Assess funding: compare the arrival date, cost and conditions of actual options such as shareholder funds or an approved credit facility. Funds not yet approved or received are not certain available cash.
• Stress-test assumptions: separately test a late payout and additional refunds, without deducting the same refund from both the payout forecast and a separate cash payment. The Australian government's cash-flow management guide also recommends reviewing inventory, supplier terms and cash flow together; its local tax guidance should not be used to infer a Chinese company's tax obligations.

Retain each scenario's assumptions, lowest balance, funding cost and operational effects for the business to decide. Update actual dates and balances when payment changes or receipts are confirmed; unconfirmed options remain forecasts.

Start with the records you have

Bring together platform settlements and unsettled balances, refunds, account balances, inventory and supplier orders. Mark expected cash dates and uncertainties. Address the earliest material gap first, then update the forecast as facts change. For an ongoing view, read weekly cash-flow planning; for the profit side, see returns and product contribution.

The CaiGeek operating-profit analysis example illustrates how to organize an operating question; it does not mean your company's calculations are complete. To discuss an appropriate product or service arrangement, use the official contact page. Share company records only through an authorized channel.