Working Capital
Category: Finance
Definition (plain English)
The short-term cash and financing capacity needed to fund inventory, deposits, freight, duty, VAT, receivables, and operating costs until customers pay.
Why it matters commercially
MOQs, long lead times, open-account sales, import taxes, and slow sell-through can tie up cash long before the gross profit is realized.
Example
An importer delayed a second container because the first order was still in warehouse stock and retailer net-60 payments had not arrived.
Common mistake
Evaluating supplier price and margin without modeling cash tied up in MOQ, transit, clearance, storage, customer credit, and payment delays.
Use this in CommerceKit
Target Buy Price Calculator
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