Managing Cash Flow in Your Skincare Business

Cash is King! Free cash flow is the lifeblood of every skincare business and intelligent cash management is a critical to keep your cash flowing. The following is a list of suggestions for maximizing the cash flow for your skincare business.

Consider outsourcing your manufacturing. I can tell you with absolute conviction that building a lotion manufacturing business is not cheap. The capital investment needed to create a lotion manufacturing business is significant both to start the business and keep it going.

Balance the cost of your inventory investment. Having skincare products sitting in boxes in a warehouse is the equivalent of cash sitting around doing nothing for your skincare brand. One way to address this issue is to do everything you can to minimize this inventory. If you are outsourcing your skincare manufacturing you will be faced with the issue of manufacturing minimums. These minimums often rob the lifeblood of your company because they require so much upfront cash. Finding a private label skincare manufacturer that lowers the minimums may help you restore cash flow and re-appropriate your cash to your marketing efforts. While the per-unit cost of each your products may be slightly higher if you adopt the lowest possible minimum contract, it will free up your cash NOW so that you can grow your business. Meanwhile, as you get sales momentum your manufacturing will grow and the per-unit cost will lower.

Minimize inventory. Do everything possible to create a just in time fulfillment process and minimize the movement of inventory and the components that comprise your skincare products. Again, every time that your inventory (or any component) is sitting around, your cash is sitting around. Anything you can do to speed up the movement of your products will speed up the movement of cash.

In our skincare food chain we do everything we can with our customers to turn the product quickly:

  • We keep unused packaging on site rather than shipping it back to our customers only to be returned upon the next contract.
  • We manufacture as quickly as possible, often within two to three weeks of signing the contract.
  • We offer industry low manufacturing minimums.

The moral of the story is that cash is king as you grow your skincare brand and managing it intelligently will maximize your investment!

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