A purchase order is not cash. For a growing consumer brand it can create an immediate cash requirement instead: the manufacturer has to be paid, the goods have to be produced and shipped, and the retailer may not pay until weeks after delivery.
That creates a strange situation. A brand can have a great product, strong margins, proven consumer demand and a confirmed order from a major retailer, and still be unable to fulfil it.
The problem is not sales. The problem is timing. And the bigger the retail opportunity gets, the bigger the timing gap becomes.
Winning retail is not the finish line
Three years of work goes into the email. Product developed, brand built, Meta ads scaled, influencers seeded, reviews accumulated, DTC sales proven. Then a buyer at a chain the founder has been chasing since the beginning writes back, and it is not "we're interested". It is "send us 20,000 units".
On paper, this is the moment everything changes. In practice, the PO is not a payment. It is an obligation to produce inventory, at your own expense, before anyone pays you for it.
The €250,000 PO that needs €90,000 today
Put numbers on that opening order.
| Retail purchase order | €250,000 |
| Units | 20,000 |
| Wholesale price per unit | €12.50 |
| Production cost per unit | €4.00 |
| Total production cost | €80,000 |
| Freight, duties, logistics | €10,000 |
| Cash required before payment arrives | €90,000 |
The brand holds a confirmed €250,000 order. There is a customer, demand, revenue and margin. There is also a factory saying 30% deposit and 70% before shipment, and a retailer saying we pay after delivery.
That sentence is the entire problem.
Manufacturers want cash before retailers pay
Large companies operate on the comfortable side of this. In the Netherlands, large companies buying from SMEs are legally required to pay within 30 days, a limit tightened from 60 days and enforced since July 2023. That protects a Dutch supplier selling to a Dutch corporate. It does nothing for a Dutch brand selling into a UK, US or German retailer, where 60 or 90 day terms remain ordinary, and nothing at all for the production and shipping weeks that come before the invoice is even issued.
Laid out on a timeline, the gap is obvious:
| Day | Event |
|---|---|
| 0 | Retailer issues €250,000 PO |
| 5 | Manufacturer requires deposit |
| 30 | Production complete, balance due |
| 40 | Goods shipped |
| 50 | Goods arrive at the retailer's DC |
| 80 to 110 | Retailer pays |
Somewhere between €80,000 and €100,000 leaves the business for two to three months, on goods that already have a buyer. Almost every step of that timeline is fixed by someone else: the factory's terms, the shipping schedule, the retailer's payment cycle. The brand carries the whole thing and controls none of it.
Growth makes the problem bigger
Then the second order arrives, before the first one has been paid.
PO #1 at €250,000. PO #2 at €300,000. PO #3 at €400,000. Sell-through is good, the buyer is happy, and the brand is now funding two production runs at once while waiting on receivables from a third.
At that point the brand no longer has a sales problem. It has a working capital problem created by sales growth.
Retail growth consumes cash before it generates cash. That is the sentence most founders learn the expensive way.
The better things go, the worse the cash problem can become
A brand selling €100,000 a month can run comfortably on its own cash. It wins two large retail accounts and grows to €300,000 a month. Excellent news, and every single input gets heavier: more production upfront, bigger minimum order quantities, more freight, more inventory, longer payment terms, more receivables, and the next production cycle starting before the last retailer has paid.
Revenue can rise 200% while cash falls. Profitability and liquidity are not the same thing, which is precisely why fast-growing brands, not failing ones, are the ones that get caught.
Why smaller brands get trapped
They are too small for the facilities that would solve this and too big to fund it from their own cash.
Traditional lenders underwrite the company: historical EBITDA, balance sheet, existing debt, bank statements, collateral, guarantees. A young brand rarely looks impressive through that lens. Perhaps €800,000 of revenue last year, €1.5M this year, and a retailer who could add €1M more.
The bank is reading last year's €800,000. The opportunity lives in next year's purchase orders. By the time the accounts justify the facility, the buyer has given the shelf space to someone else.
The available answers all cost something. Equity is the most expensive capital there is, and using it to fund a production run is an unusually poor trade. A loan puts debt and often a personal guarantee behind a single order. Factoring only helps after the invoice exists, which is 50 days too late on the timeline above.
Every one of those options finances the brand. None of them finances the trade.
What if the brand did not have to finance the retail order at all?
That is a different question, and it has a different answer.
Instead of the chain running manufacturer to brand to retailer, with the brand fronting every step, Master Distribution reroutes who carries the transaction. The retailer issues the purchase order to OceanX. The brand pays a 30% deposit and OceanX pays the supplier the full PO in cash. The goods ship factory-direct to the retailer's distribution centre, with no warehousing step in between. OceanX invoices the retailer, and when the retailer pays, the brand's margin is remitted.
The brand stays commercially in the middle of the relationship. The buyer relationship, the brand, the product decisions and the shelf all remain the brand's. What moves is the balance sheet the transaction sits on.
What that looks like on a real order
Take the beauty brand version. A €300,000 retail PO with €90,000 of production cost. The manufacturer wants €27,000 as a deposit and €63,000 before shipment. The retailer pays 60 days after delivery. The brand has €40,000 of unrestricted cash.
Self-funded, it cannot be done. Three options remain: decline the order, raise money against it, or go back to the buyer and ask for a smaller one. Each of those slows the business down, and the third damages the relationship you spent three years building.
| Self-funded | Master Distribution | |
|---|---|---|
| Cash the brand puts up | €90,000 | €27,000 deposit |
| Supplier paid | By the brand, in two tranches | By OceanX, in full |
| Who invoices the retailer | The brand | OceanX |
| When the brand sees margin | 80 to 110 days after PO | On retailer payment |
| Feasible on €40,000 of cash | No | Yes |
The brand still waits for the retailer, because nobody can make a retailer pay faster. What changes is that it is no longer waiting while €90,000 of its own money sits inside someone else's supply chain.
OceanX charges a margin on the goods it purchases, set by the term of the deal and known before anything is signed. Whether that trade makes sense is a straightforward test: does the wholesale margin on the order absorb it comfortably? On a product costing €4.00 and wholesaling at €12.50, it usually does by a wide distance. On thin-margin goods it does not, and we say so before the PO is accepted rather than after.
From getting into retail to staying in retail
Here is the part that turns a cash problem into a commercial one.
Under-delivering to a big retailer is not a private embarrassment. It is a measured, scored and penalised event. Walmart's on-time in-full programme runs a 98% compliance threshold with roughly a 3% charge on the cost of goods for non-compliant cases. Target charges 5% on the cost of goods for short or over-shipments and 3% for a missing or late ASN. Across the sector, industry estimates put chargeback deductions on 5 to 15% of manufacturer invoices to retailers.
The scorecard damage outlasts the deduction. The buyer allocated shelf space, built a forecast, planned marketing and turned down other brands to make room for you. Deliver 60% of the order and you have not just lost 40% of the revenue, you have spent the credibility that got you the listing.
Winning the first PO gets you into retail. Being able to finance PO #2, #3 and #4 keeps you there.
That is also where the flywheel either starts or stalls. With enough trade capacity: opportunity, PO, production, delivery, sell-through, a larger PO, more production. Without it: opportunity, bigger PO, cash shortage, constrained production, missed delivery, smaller next order.
The capital does not just make one transaction possible. It stops working capital from becoming the ceiling on your distribution.
The point
A brand can have excellent sell-through, 70% DTC gross margin, a real audience, repeat purchase rates any investor would like and confirmed retail purchase orders, and still be unable to grow because there is €100,000 too little in the bank.
Your ability to win retail should be determined by consumer demand, not by how much cash happens to be sitting in your account when the buyer says yes.
Big retailers should not require a big balance sheet.
FAQ
Why does a retail purchase order create a cash problem?
The manufacturer requires a deposit and the balance before shipment, while the retailer pays weeks after delivery. Production, freight and customs sit between those two events. A brand can therefore need to fund the full cost of goods for two to three months on an order that already has a confirmed buyer.
How much cash does a €250,000 retail order actually require?
At €4.00 production cost across 20,000 units, roughly €80,000 of production plus around €10,000 of freight and duties, so about €90,000 before any payment arrives. The exact figure depends on unit economics, but the pattern holds: roughly a third of the PO value, paid months early.
What is Master Distribution?
An OceanX programme for brands winning retailer orders too large to fund from their own working capital. The retailer issues the PO to OceanX, the brand pays a 30% deposit, OceanX pays the supplier in full, goods ship factory-direct to the retailer's DC, and the brand's margin is remitted when the retailer pays.
How is this different from a working capital loan?
A loan finances the company against its history, requiring EBITDA, collateral and often a personal guarantee. Master Distribution finances the trade: the purchase order, the goods and the retailer's creditworthiness carry the transaction, so a young brand's balance sheet does not have to.
Can a brand still own the retailer relationship?
Yes. The brand keeps the buyer relationship, the product decisions, the branding and the shelf space it won. What changes is which balance sheet carries the transaction between the factory and the retailer's distribution centre, and who fronts the supplier payment while the goods are in production and transit.
Holding a retail PO you cannot comfortably fund? Send us the order and the supplier terms, and we will tell you within days whether it works: book a call with Arjo.
Arjo Huijbregts is responsible for Business Development in Europe at OceanX AI. He structures inventory and trade finance deals for consumer brands across Europe.