Ep.294 Zara’s Cash Machine: Negative Working Capital

Zara’s Cash Machine: Negative Working Capital
Most retailers bleed cash by buying inventory first and waiting months to get paid. Zara flipped the script.

They sell limited runs, collect cash fast, and only then pay suppliers. That timing creates negative working capital—the company grows on customer cash instead of bank loans. The result? Less inventory risk, faster cycles, stronger margins.

Here’s how you can apply it:
 ✅ Shorten your cash cycle with smaller batches, faster launches, and fewer SKUs.
 ✅ Tighten payment terms where fair, and nudge customers to faster pay with small incentives.
 ✅ Kill slow-moving products quickly—cash is oxygen, not decor.

I’ve guided founders through this exact shift. It’s not just math—it’s courage.

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