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> if you have significantly more customers than product you're going to run out of cash eventually I don't get this. Why do you run out of cash simply because
by elaus 3y ago
> if you have significantly more customers than product you're going to run out of cash eventually
I don't get this. Why do you run out of cash simply because there's more demand than you have production capacity? I would think having open orders doesn't cost money.
- netsharc 3y agoLinus (Tech Tips) has a video talking about cash flow: https://www.youtube.com/watch?v=LSxbc1IN9Gg https://www.youtube.com/watch?v=LSxbc1IN9Gg
- martin8412 3y agoBecause they can't charge the customers before shipping the product. Their operational costs may be higher than what they earn from the amount they can ship.
- weego 3y agoI have no idea how their business works internally, but it's very easy for physical goods vendors who extend into supply chain verticals to end up with all their capital tied up in hardware. Not being able to ship due to a missing critical piece (in this you could see a situation where they have everything ready and in storage but waiting on battery supply) is a real problem and can leave your business functionally bankrupt (zero liquid capital) while having lots of assets.