<aside> 💡 One of the biggest constraints for any eCom brand (and in fact, more or less any retail business whether online or offline) is CASHFLOW.

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Understanding how you can optimize your cash flow is crucial for surviving in todays climate. At Obvi, our ability to create negative cash conversion cycles and always have free cash flow in our hands has been probably the most important reason for our success.

Here’s how we do it:

Parker and Plastiq

If you’ve ever listened to any of the podcasts I’ve been on, you know that I’ve mentioned Parker and Plastiq at least a thousand times before. However, let me give you a quick intro in case you’re not familiar with them.

Plastiq: Allows us to pay an ACH via. a credit card Parker: Is a credit card that allows us to get interest-free net 60 terms + gives us the option of getting net 90 for a low interest.

Combining Plastiq and Parker, we are able to get 60 to 90 days of additional runway for 3%. That’s a hell of a lot cheaper than getting a loan, and a hell of a lot cheaper than raising money and diluting equity

Let me give you an example;

• My partner Ash spends $420k on Facebook Ads
• We get billed on net 30 terms from Facebook
• Get take the ACH from Facebook and pay it through Plastiq - which allows us to pay with our Parker Credit Card
• We now got 90 days to pay for $420k worth of media. $420k worth of media easily translates into hundreds of thousands or even millions in topline.

That’s how we like to play the game

Creating negative cash conversion cycles with manufactures + inventory financing

Option 1: Negotiate with manufacture

When negotiating with our manufactures, we always ask for two price points.

1 with a 50% down payment + 50% of the payment upon shipping 1 with a 50% down payment + net 30 balance