CPG business is very cash-intensive: Ecommerce Wisdom Nuggets #62 #ecommerce #CPG

CPG business is very cash-intensive: D2C Wisdom Nuggets #62 with Eli Bank, Co-founder of Absurd Snacks.

🏦 Cash management is a crucial aspect of any business, but it is especially important in the CPG industry. This is because CPG businesses typically require significant upfront investments in product development, manufacturing, marketing, and distribution.

😬 These costs can quickly add up, and it can take several months or even years for a CPG company to break even and start generating a profit.

🔁 Moreover, CPG businesses often have to deal with long payment cycles from retailers and distributors, which can put a strain on their cash flow. In some cases, CPG companies may need to offer discounts or incentives to encourage retailers to pay their invoices more quickly.

📄 To succeed in the CPG industry, it is essential to have a solid cash management strategy in place. This may involve negotiating favorable payment terms with suppliers, optimizing inventory levels to avoid stockouts or overstocking, and implementing efficient invoicing and collections processes.

💪🏻 By managing cash effectively, CPG companies can ensure they have the resources they need to invest in growth and stay competitive in the market.

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#ecommerce #CPG #d2c