Your sales aren't bad. So why does it suddenly feel like there is no money in the bank?

Hi, I'm retail strategist and founder of Resilient Retail Club, Catherine Erdly.

Every September and October I have the same conversation, and it is almost always with someone who is convinced they have done something wrong. You planned Christmas properly. You placed the orders. And now, right on cue, the invoices for all of that stock are landing while the Christmas sales that are supposed to pay for them are still months away. Your VAT, your wages and your rent carry on regardless. That is the Christmas cash flow pinch, and it turns up in the same fortnight every single year.

What I want you to understand is that this is not a mistake you made. It is the shape of a seasonal business. Retail runs on the gap between paying for stock and selling it, and Christmas stretches that gap wider than any other point in the year. It happens at the very top of the industry too. When I worked in big corporate retail we had a standing set of meetings for exactly this problem, with a name I have never forgotten, and the thing we were protecting was not the bank balance you would assume. At Paperchase we took half our year's revenue in the fourth quarter, sometimes more. You do not survive a shape like that on optimism.

So in this episode I take you through four things you can do over the next few weeks to ease the squeeze. Which stock is quietly holding your money to ransom, and how to get it out. How to build a Christmas buying budget so that every pound you spend has a job to do instead of being a hopeful just-in-case. How to reshape your delivery dates and your payment terms so the cash leaves your account later than it otherwise would. And the one thing not to do when the balance looks tight. By the end you will know exactly what to review this week, what to ask your suppliers for, and why September feeling like this is information rather than a verdict. Press play and I'll walk you through it.

CHAPTERS

00:00 The Christmas cash flow pinch (and why it isn't your fault)

05:20 Way one: free the cash trapped in old stock

07:57 Way two: buy with intention, not "just in case"

09:14 Ways three and four: flow your stock in, and don't panic

LINKS

Free Get Set for Christmas planner: https://www.resilientretailclub.com/christmas

Free cash flow planner: https://www.resilientretailclub.com/cashflow

Find out more about Stock Doctor: https://stockdoctor.net

All episodes of the Resilient Retail Game Plan: https://www.resilientretailclub.com/podcast/

Catherine on LinkedIn: https://uk.linkedin.com/in/catherineerdly

Faire (mentioned in this episode): https://www.faire.com

Mentioned in this episode:

Home and Gift Association is our sponsor this month

https://www.homeandgiftassociation.org.uk/

Capify

Every September and October, I have exactly the same conversation.

My sales aren't bad, but why do I suddenly feel like I've got no money?

If that's you, then you are not alone.

Before we jump into today's episode, I want to let you know

about a couple of resources that I have that can help you out.

If you head to resilientretailclub.com/christmas, you can get our

free Christmas planner to help you have the best Christmas yet in 2026.

The other thing that will be really helpful is if you head to

resilientretailclub.com/cashflow.

You can get your hands on my free cash flow planner, which will help you really

understand all of the ins and outs of money coming in and out of your business

and how to manage it at this time of year.

Welcome to the Resilient Retail Game Plan.

I'm Catherine Erdly, and this podcast is here to share retail industry

trends, insights, and best practices.

For you, the retailer who's serious about building something that lasts.

So I wanted to put this podcast episode in.

I think it's a really important episode to have at this point in the year

because a lot of retailers that I talk to feel very stressed out by what

I call the Christmas cash flow pinch.

What happens is you have got plans for Christmas, you place your orders, and

then September, October comes along.

You have to pay for a lot of these products.

Even if you've used Faire's 60-day payment terms, you may still end up

with bills coming out now, which is really all about your stock that you're

purchasing for Christmas, but you haven't had your Christmas sales yet.

And the thing is that a lot of people feel very bad about this.

They feel like they've messed up.

They made some big mistake that maybe they don't know what they're doing.

And I wanted to talk about it today because I want you to

know that you are not alone.

This is something that happens to pretty much all retailers, and that

includes the really big guys as well.

When I worked in big corporate retail, we would have these meetings, which

was called Four Ps - Pushing Payments Past Peak - which was basically where

the finance team made us go through every single supplier and try and

see what we could do to move our invoices a couple of days or a week.

We'd split things down even further, extend payment terms, whatever

we could do, because whatever bit we could eke forward, then we would

be able to improve the cash flow of the business and basically make it a

little bit easier for the finance team.

And we're not talking about, they were worried we were gonna run out of money.

We're talking about, they were worried they were gonna hit the

bottom of their overdraft limit.

So it wasn't a question of not having any money in the bank, it was that they

had hit the bottom of the overdraft limit that they had been given.

So what we're seeing is then that retailers often have this issue.

They get to the point, this point in the year, it's just the way it goes.

For a lot of retailers, for example, at Paperchase, we would

be getting half of our revenue for the year in the fourth quarter.

If not more.

And this happens to a lot of businesses, which are very heavily gift focused.

So when you've got that situation, you have got a huge up and down

in terms of your sales coming in and the expenditure going out.

So a lot of people describe it as feeling like you're going up the slope of a

rollercoaster, you know that you're going up and up and up and up, and you've got

that sense of anticipation building.

You just don't know how it's gonna feel when you go down the drop.

Is it gonna be super exciting or terrifying, or maybe a bit of both?

So that's you, if you're feeling like that.

If you're thinking, I really messed this up, I should have done it differently.

I just want you to know that this is effectively a part of the way

that the retail industry works.

It's part of the way that the seasonality works and it's part of the pressure

of having a very seasonal business.

So every year retail businesses have to live in the gap between buying

the stock and selling the stock.

And the longer that gap, the more cash you need.

Christmas really stretches that gap out because you're buying more

stock than you normally would buy.

You may be buying earlier because you want to make sure that

you secure your best sellers.

The supplier invoices arrive before the sales do, and then your VAT payments,

your wages and your rent, they don't stop.

So, as I said, we have things like 60-day payment terms on Faire, which can be really

helpful, really beneficial to businesses.

They also have the Faire Christmas fair earlier in the summer, and people

often use that as an opportunity to top up for their Christmas orders at a discount.

But then it can also mean that those payments start hitting

at a tricky point as well.

So there are lots and lots of different things going on.

It's all incredibly normal and it's all something that I see every single

year and every single year if I ever mention it, people always tell me how

appreciative they are because they, most people get themselves in this

situation and feel like it was their own fault for messing things up.

So that is the first point, is that this happens.

It's natural, it's normal.

And what we just need to really think about is how do we work around it?

What can we do?

What can we possibly do to make this easier?

So four ways to ease the squeeze at this time of year.

The first thing that I want you to think about is any stock that you are currently

sitting on right now that is slowing you down, you just can't sit on trapped stock.

That isn't going to sell, that isn't even going to sell at Christmas.

Anything that is holding your money to ransom - which is what excess stock

does - anything like that has got to go, that has got to be cleared out.

And the more you can do that, the better your cash flow will feel and the

less of the squeeze that you'll get.

So make sure you are culling ruthlessly.

If you were thinking about doing that sample and seconds sale, do it now.

If you have so much stock that you feel like you can't clear it through the shop,

can you hire a venue, or a table at a market or an event or something

like that where you can put things on a discount and try and sell through?

You want to free up your cash, your space, your mental bandwidth.

This is one of the first elements that we look at with Stock Doctor.

You can find out more about Stock Doctor at stockdoctor.net, but this is

exactly what we do in terms of looking at where are the areas of trapped cash.

Now this is not about saying, oh, you've just gotta discount everything.

And obviously we are very much focused on trying to protect your brand, but

in terms of targeted discounting, this would be a great opportunity for

you to really look around and say,

Where is there anything that I can free up?

Now, if this is your prime stock that you know you're gonna sell at Christmas,

absolutely do not sell it at a discount.

Now we're talking about the stock that you probably, in your heart of hearts,

know you don't really wanna carry forward.

You don't even think it's gonna sell at Christmas.

You really just wanna make sure that you are free of it.

Cleared out, really reduced anything that's just

hanging around any clutter.

And you can do that through a flash sale or a story sale on social media, you

can do it through targeted discounts.

You could even just offer discounts to your mailing list if you don't wanna have

a big message everywhere talking about discounting, but do what you can now, you

can do an end of summer sale clearance.

Clear it out to make sure that you are not carrying anything that you just don't

think is really great stock, because that is where your cash is trapped.

So you wanna bring down any excess stock that you possibly, possibly can.

As I said, this is now - it's kind of like the 'check down the

back of the sofa for coins'

time of year.

Like, okay, well what have I got?

What can I work?

What can I release?

What's gonna help me walk through this tight time of year?

The second thing I would say is making sure that you're

really buying with intention.

So don't buy just in case.

Don't over purchase things that you think you might need at Christmas time.

Make sure that you have a sales forecast for Christmas.

Make sure you use that to create a stock budget.

Make sure that you then take that and look at a buying plan.

Again, this is all work that the Stock Doctors do for their clients.

We do a full Q4 analysis audit, work out exactly how much money they have got to

spend and what they should be spending on.

But think about every single penny that you're spending in the business.

It has a job to do.

So again, you don't want to just top things up just in case you want

to really go through and for every single item that you're purchasing,

ask yourself, is this a best seller?

Is this something that I absolutely need to have to make my Christmas work?

And how can I really just keep it as tight as possible so

that I'm not over-purchasing?

On that note as well, this is also a really good time to go through and look

at if there are any expenses coming out in your business, any subscriptions

that you don't really need anymore, anything like that, that you just think,

actually, this is something I can free up so that I've got just a little bit

of extra money as we go into Christmas.

The third thing to think about is flowing your stock in.

So do you really need everything delivered right now?

Have a look at whether or not you can move some of your deliveries back.

So, for example, can you split any of your deliveries?

Now, it will depend on suppliers.

Some suppliers, you just won't be able to split things, or you'll end up having

to bring it in earlier than anticipated because you just know if you don't,

it's gonna get stuck in customs or it's just gonna be a nightmare and

you're gonna miss the selling season.

So you don't wanna miss any sales.

But you also can have a look and just double check, are you bringing everything

in for the beginning of October?

For example.

Other things that you could maybe hold and bring in at the beginning

of November, or even the beginning of December, depending on your sales

pattern, you may actually see that December is still your biggest month.

So does everything need to be here right now for the middle of September

or even the end of October, if you don't think you're actually

gonna sell it until December?

Basically, going back to the anecdote from my days in corporate: that every

single day that you can push things back is another day that you don't have to

pay for it and it's all gonna help you.

So take a look at what you've got coming in.

Can you split it into two orders instead of one big order?

Can you hold off some particular brands?

Because sometimes it can be nice to have a bit of a refresh on your

Christmas stock a little bit into the season because it gives you something

new to talk about, something new and fresh to engage with your customer.

If you've been a really great customer to your supplier and

you've worked with them for years, ask them about payment terms.

Ask them if there's any way you could pay for this a little bit later.

Ask them if you could split payments.

Can you look at other things that you might otherwise

be paying out all at once?

Can you look to split those onto a payment plan?

What can you do to ease your payments?

Try and really push back your bills, reduce those and then

try and really flow your stock.

Are there things that can just come a bit later?

Does it all have to be there hand on heart for the 1st of November or is

that just going to cause you trouble?

Big retailers do this all the time.

I cannot tell you how much of my job used to be all about trying to

work out exactly what's going on with the deliveries, making sure I

pushed it back, making sure I eked out another day or two days or a week

from payment terms. We were constantly juggling things, moving it around

because we were just trying to reduce the amount of time between

us having to pay for something and it being bought by the customer.

Because the more you can really reduce that gap, then the better it will be.

If you really trust your suppliers and if you have some items which

are super popular at Christmas, you could consider doing a pre-order.

I would only suggest this if it's a supplier that you really, really trust,

because nothing is more frustrating than trying to unpick a pre-order where you

haven't been able to fulfil the orders for everybody or they're all running late.

So this can be a bit of a stress thing, but again, if you've got like

a certain number of products that you bring in that you know they sell

out immediately, why not offer it on pre-order to some of your customers?

'cause again, that really helps with this idea of when you are getting paid

versus when you have to pay the supplier.

So the fourth thing is don't panic.

The answer isn't about just stopping all expenditure.

It's often about trying to buy smarter.

It's about trying to manage that gap between paying for stock and selling

it and doing whatever you can to try and move that in your favour.

So the more you do this, the easier Christmas becomes.

But for sure, make sure go through everything and just see what could you

sell over the next few weeks to just really help with your bank balance.

So this week, make sure you're reviewing your old stock.

Make sure you build a Christmas buying budget.

Speak to suppliers if you need more flexibility, and go to

resilientretailclub.com/cashflow if you want to get my free cash flow planner

to help make it all make sense.

So now we've talked about managing your cash flow.

In the next episode, we're going to be talking about how to decide

what deserves your buying budget.

Don't forget to tune in next week.

And of course if you like, follow or subscribe, you'll be the first

to know about the next episode when it comes out next Thursday morning.

See.