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Inside Waddle

Got An Inventory Purchasing Strategy For EOY? Here’s What You Need

Forward plan capital needs for supplier payments

Team WaddleTeam Waddle

Image credit: MIT Technology Review

End of year is approaching quickly, planning your inventory purchases is critical for peak trading periods.

Have you planned sufficient working capital for end of year supplier orders?

Inventory management is a critical component to taking advantage of end-of-year sales.  But, it doesn’t just stop there.  How have you prepared for hiring and retaining part-time workers?  How will you balance marketing expenses while ensuring your employees are paid on time?

SEE ALSO: [RESEARCH] Save 5+ hours per week using “cloud” inventory management software

If successfully managing inventory has the greatest impact on your sales revenue, then your capacity to finance inventory with flexibility falls right into that bucket.

Your suppliers may require you to prepay or pay cash on delivery for inventory, resulting in an extended lead-time as the inventory is manufactured and shipped to you (overseas shipping may take even longer).

Waddle’s Revolving Line of Credit is ideal for businesses that have recurring inventory purchases that require a significant cash outlay from the business.

Rather than locking yourself into a fixed term loan or expensive short-term loan, you can drawdown on your Waddle credit line and repay it as soon as your inventory is sold. You only paying interest on the balance instead of getting locked into expensive fixed terms that not only fix you to interest charges over say six months they also don’t allow you to borrow again until you pay if off it full.

Looking for a stock funding option? Take a look at Waddle here

How much might it cost you with Waddle?

Lets assume by the time you pay your supplier up front, products are delivered and sold, it’s a period of sixty (60) days. If you drawdown $25,000 for stock purchases from Waddle it might only cost you an estimated healthy $450.00 and you could pay it down in full at the eight week point without having to make any payments along the way to avoid any impact on your cash flow.

Each and every time you need to purchase new stock you can draw down funds and repay them efficiently to maximise the profit you make out of each inventory cycle (purchase).

The impact of taking an expensive fixed term loan

If you tried to go with a fixed term loan and borrow $25,000 for eight (8) weeks you would need to take out the loan for a minimum of six (6) months when you only required use of the funds for eight (8) weeks. The average cost of finance over this period would be $10,000 based on our research.

The profit you originally used the funding for would have been completely eroded away and you couldn’t apply to draw down further funds until you have repaid the loan in full, including the fixed interest of $10,000 you agreed to pay the lender for the term.

To add to that, you’ll be required to adhere to fixed repayments either daily, weekly or monthly and if you don’t sufficiently plan for this you will be hit with late payment fees or worse yet fall into default with the lender.

The most efficient use of a fixed-term loan is for asset purchases like equipment or an asset that can be depreciated over longer periods to be replaced at the end of its lifecycle.

Equipment purchases generate new revenue over long periods of time and require financing that matches the cycle. Inventory has a short life cycle, hence why the finance that you take should match its intended use and be paid off as quickly as possible after generating the proceeds related to the stock sales.

There’s a solution that matches your inventory cycles

Businesses require revolving use of funds that offers the flexibility and cost savings by matching repayments to stock purchases and sales. Waddle’s Revolving Line of Credit provides a seamless experience that lets you focus on what really matters: your customers.

Waddle provides a borrower portal that delivers you cash on demand linked directly to your sales.

Inside you’ll get access to:

Waddle is championing healthy small businesses like yours with affordable working capital.


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Waddle regularly shares client growth stories, thoughts on Fintech, lending, company culture, product strategy and design.