Here is the founder question: "We are placing our first big stock order from China. The supplier wants 30% with the order and 70% before it ships, and every guide I read explains landed cost per unit but never when the money actually leaves and when it comes back. How do we plan the cash so a good order does not put us under?" Here is the direct answer: an order is not a purchase, it is a cash timeline. The deposit and the balance plus freight leave before the stock is sellable, the duty payment lands on its own deferment date, and the money comes back slowly, once stock sells and each marketplace pays on its own delivery-based cycle. In the illustrative example below, a £30,000 order soaks up about £35,600 of cash, and you should budget on five to six months for it to fully return. That timeline, not the unit cost, is the number you are signing up for.
We work inside UK supplement and consumer brands from 1m to 20m, and in our work stock funding causes more scary months than any other single line. The P&L looks fine throughout. The bank account does not.
Here's the Short Version
- Every order has separate cash-out dates for the deposit, the balance and freight, and the import charges. Payments come first; collections arrive months behind them
- Plan on 9 to 13 weeks from deposit to sellable stock, then budget five to six months for an order to fully return
- Postponed VAT accounting keeps import VAT off the border: in the worked example, £7,128 never leaves the bank
- A duty deferment account moves the duty bill to the 16th of the following month, giving 2 to 6 weeks of credit
- The second order creates the overlap. The reorder decision usually lands around month three, when collections from order one may only just be starting, so the peak cash gap can include payments on both orders
- 30% deposit and 70% before shipment is common practice, not a rule, and it is negotiable
- Keep one page: money out and conservative collections for the next 8 weeks, and let the lowest point decide how much cash you hold
The Cash Timeline of One Order
A stock order from China is not one transaction. It is a series of separate cash events, the deposit, the balance, the freight, the import charges, then months later the collections. How far apart they fall depends on production, shipping, customs and deferment dates. Get them onto one page and the problem stops being a mystery.
The dates that matter are the order date, when the deposit leaves; the shipment date, when the balance and the freight leave; the arrival date, when clearance and haulage land and the duty liability arises; and the collection date, when the marketplaces finally start paying you back. Founders track the first three badly, the fourth not at all. If you cannot name all four dates for your next order, that is the gap this post closes.
Here is the shape of a normal sea freight cycle. Production commonly takes four to six weeks from the deposit. When the goods are ready, you pay the balance and the freight, and the container sails. Ocean transit commonly takes another four to six weeks, then clearance and haulage can add about a week. Run those stages back to back and you are looking at 9 to 13 weeks from deposit to sellable stock, when everything runs on time. Many Chinese factories also close or slow for the National Day holiday, 1 to 7 October this year, and for longer around Chinese New Year, so confirm your supplier's dates and leave slack in the plan.
Then the other half of the cycle starts, and it is where the optimism goes wrong. Your stock lands, launches and sells. The platforms pay on their own schedules, and none of them pay when you invoice. TikTok Shop measures settlement from delivery, not sale: current UK periods run 31 days for new or probationary sellers, 8 days standard, and 3 and 1 day tiers for the platform's strongest performers, with a further 31 day deferred period possible during security checks. Reserves can hold part of a settlement back, and the bank transfer takes a few more days after release. Amazon disburses on a cycle that defaults to about every two weeks, with money normally reaching the bank a few business days after the payment. Every day of settlement lag is a day your cash funds the platform's float instead of your next order.
Add it up and the planning number looks like this: stock lands after two to three months, payouts trail each delivery by days to weeks, and you should budget on five to six months from deposit to recovering the cash invested. Read that as a budgeting assumption, not a promise that every unit has sold and every payout has settled. If that feels longer than the spreadsheet you built, it is because most spreadsheets model selling, not collecting. It is the same gap we broke down in The Cash Gap Explained.
The quarter to watch is roughly month four: stock is selling, payouts are thin, and order two's payments are falling due. Nothing is wrong with the business. The plan is built on the wrong dates.
Worked Example: The £30,000 Order
Illustrative example with synthetic numbers, built to show the arithmetic rather than any client's order. A supplement brand orders 20,000 units at £1.50 each, so £30,000 of goods. The supplier asks for 30% with the order and 70% before shipment. Sea freight and insurance come to £3,000, putting the customs value at £33,000. The product classifies to a food preparation code at 8% duty, and the brand uses postponed VAT accounting.
| When | What leaves the bank | Cash out |
|---|---|---|
| Week 0, order placed | 30% deposit | £9,000 |
| Around weeks 4 to 6, goods ready to ship | 70% balance | £21,000 |
| Around weeks 4 to 6 | Sea freight and insurance | £3,000 |
| On the deferment payment date, normally 2 to 6 weeks after the import declaration | Duty at 8% on a £33,000 customs value, deferred and collected on the 16th of the following month | £2,640 |
| At the border | Import VAT of £7,128, under postponed VAT accounting | £0 |
| Total cash out | £35,640 |
Notice what is missing from that table: anything coming back in. The £35,640 leaves on separate dates, from the deposit through to the deferred duty payment. Receipts can start once stock is sellable and orders are delivered, so the first receipt date depends on sales, delivery timing and each platform's settlement rules. That is why "can we afford the order?" is the wrong question. You can afford the deposit. The balance is the test, and the collection gap is the exam. If your product carries a different commodity code, check the duty rate that applies to that exact code, and we walked through how codes are assigned in supplement import duty and commodity codes.
Now the part most plans miss: order two will need placing while order one is still selling. With a 12 week lead time and replacement stock needed around month six, the reorder decision comes around month three. Two identical orders create £71,280 of gross order cash out in total, £35,640 each, before deducting collections. That is a total gross figure, not automatically the peak funding requirement. Order two's deposit, balance and freight can leave while order one is only starting to collect. The net peak is the largest week-by-week gap between cumulative cash out on both orders and cumulative collections from both orders. That overlap, not either order on its own, is where a cash plan earns its keep.
The Levers That Move the Number
Six levers, roughly in order of how much cash they free. None fix a bad order. All of them buy room.
Take your import VAT off the border. Postponed VAT accounting means you declare the import VAT and recover it on the same return rather than paying it at the border and reclaiming it later. You need to be VAT registered with an EORI number, and you must tell your customs agent in writing before the declaration is submitted. You cannot change your mind once it has gone through. Each month HMRC posts your postponed import VAT statement online, which is your reclaim evidence. In the example above, that one step kept £7,128 in the bank. If you are not VAT registered, treat registration as your first import task, because otherwise that VAT is a real, permanent cost.
Defer the duty. A duty deferment account turns the duty bill into a monthly Direct Debit: everything you defer in a calendar month is collected on the 16th of the following month, or the next working day, giving 2 to 6 weeks of credit, an average of 30 days. There is a guarantee waiver you can apply for, with separate application routes for monthly limits up to £10,000 and higher; HMRC can ask for financial information even in the lower band, and the higher route needs a PFS1 and supporting documents. Applications aim to be processed within 30 working days, so set the account up before your first container arrives. One clarification: with PVA there is no import VAT to defer, because it never leaves your bank. A deferment account can also cover import VAT for businesses not using PVA.
Negotiate the schedule, not just the price. The 30/70 split is a convention, not a law. Three asks, in order: stage the balance against production milestones rather than paying it in one lump before shipment; pay it against a copy of the shipping documents rather than before the goods are on the water; and once you are a repeat buyer with a track record, ask for terms. One hard rule: never send 100% up front to a supplier you have not worked with. If they insist, that is information.
Match how you buy to how you sell. The cheapest cash flow fix is buying smaller and more often. Splitting a £60,000 order into two can stagger the balance payments and cut the peak cash committed at any one time, though it does not shorten lead times by itself. You pay for that in unit cost and freight, so it is a trade rather than a free lunch, but usually worth making on a first order. Same for air freight: it exists for launches and stockouts at multiples of the sea rate, never for core stock with months of runway. We laid the freight maths out in the landed cost model for supplement brands importing from China.
Deal with currency deliberately. Chinese factories usually invoice in US dollars, so your order carries two exposures, not one: priced in dollars, held in pounds. A 5% move between the deposit and the balance changes the sterling cost of the £21,000 still owed by about £1,050, and nobody refunds that at the end. On small orders, converting each payment as it falls due is defensible. On large orders, pay the deposit and balance close together if you can, or ask your bank about a forward contract. The point is to stop a good margin becoming a currency anecdote, not to speculate on sterling.
Get the financing order right. Financing gets most of the attention and fixes the least, for one structural reason: lenders want something to lend against. Invoice finance needs customer invoices, and until the stock sells there are none. Import finance and trade finance can fund stock before sale, including goods in transit, but they come with their own criteria and security requirements. So the realistic ladder runs: supplier terms, then your own buffer, then a business loan sized to the order cycle, then structured facilities at real scale. If your plan needs a facility, arrange it well before the shipment: finance applications take time, and freight schedules can change too. We would not fund core stock on a credit card, or sign funding priced against a whole order when the gap is one season long. We went through the options in how a scaling supplement brand should fund inventory before Q4.
What Else Is Coming for Your Cash in the Same Window
An order does not exist in a vacuum, and the bills in its window matter as much as the order. The most underrated is the VAT sitting inside your own sales. Supplements are standard rated, so one sixth of every VAT inclusive price you charge is tax that is not yours, the equivalent of 20% on the net price. It arrives with your takings and leaves on your next return, due one month and seven days after each quarter ends. In a growth year, that is a serious direct debit. If your taxable turnover is £1.35m or less, the VAT Cash Accounting Scheme lets you account for output VAT when payment reaches you rather than when you invoice. One catch for marketplace sellers: payment received by the platform can count as received by you, so check how much it really shifts.
Then payroll and ad spend, which never pause for a stock order, and corporation tax, normally due nine months and one day after your accounting period ends. A stock plan that holds £30,000 of headroom and no idea about the VAT bill is a hope with a table in it.
One Page, Once a Week
The tool that keeps you safe is embarrassingly simple. One page, three columns. Money out over the next 8 weeks: every order commitment, the VAT bill, payroll, ad spend. Money in over the same window, built from conservative collection assumptions, and by conservative we mean cut your forecast. Then the running balance. The lowest point on that page is your real funding requirement, almost never today's balance: it is some specific week in the months ahead, and you get to see it coming.
Run it weekly, not monthly, because arrival dates and collection curves move weekly. Thirteen weeks is the classic view, but one China order cycle can outlast thirteen weeks, so use weeks for the quarter ahead and the order cycle map beyond. Then one rule without exception: no deposit leaves the business unless the plan stays positive with collections at 70% of forecast and costs at 110%. That sentence is worth more than any funding round.
FAQ
How much cash should I hold before placing a stock order from China?
Enough to cover the full cash cost of the order, goods plus freight plus duty, without counting a pound the order will earn, plus two to three months of running costs. In the example above, the order itself needs £35,640 of funding, with the buffer above that. If the order only works when collections arrive early, it is too big. Cut the size rather than the safety margin.
How long before the money from a China stock order comes back?
Plan on nine to thirteen weeks from deposit to sellable stock, then add selling time and settlement lag. Budget on the first meaningful payouts around month four and on recovering the initial order cash around month five or six. If stock is still selling in month six, the final marketplace collections will come later, so treat anything faster as a stretch rather than a plan.
Is a 30% deposit and 70% before shipment normal?
It is the common pattern with Chinese manufacturers, not a statutory rule, and it moves with the relationship. New suppliers ask for more up front, established ones can move to staged payments and occasionally to terms. Never pay a new supplier in full, and put the payment dates into your cash model the day you sign the order, not the week the invoice lands.
The Bottom Line
Buying stock from China is a wonderful way to be profitable and skint at the same time. The order that feels like a purchase is really a five to six month financing decision with a product attached. Before your next deposit leaves, do three things: write down all four dates, deposit, shipment, arrival and collection; switch on postponed VAT accounting and a duty deferment account so the border stops eating your cash; and size the first order so the overlap cannot hurt you. Turnover is vanity, profit is sanity, and in the China trade, timing is survival.
If you want your order cycle mapped properly, with the VAT, duty and payment dates in one model you can run weekly, that is our daily work. We are specialist social commerce accountants for UK ecommerce brands from 1m to 20m, and cash flow planning for stock heavy brands is one of our core services. Book a call and we will build the first version of your order cycle map with you.