Sarah (from the Boutique Hub) explains how unfulfilled purchase orders tie up retailer cash and inventory life-cycle relevance. She advises immediately recording every purchase order (vendor, order date, item details, cost, retail price) and—critically—setting a firm cancel date. Near a cancel date retailers should request tracking; if the vendor cannot confirm shipment, cancel the order to reclaim cash. She also urges open communication: vendors should request extensions proactively when needed. The overall goal is to free cash, prevent outdated inventory, and keep buying power and floor/website space productive.
Chapters
Hey guys, it's Sarah with the Boutique Hub. I am back today to answer one of the questions we're asked an awful lot. Yes, this is definitely a frequently asked question on orders, unfulfilled orders, right? You place an order, you enter into this contract with a vendor, whether it's somebody you buy from online on a wholesale marketplace or over the phone or whatever it is, or maybe you're one of the lucky ones and going to market. But then the goods never show up, right? And what I'm feeling is, or I'm fielding a lot of questions from boutique and retailers that are saying, well, I think it was supposed to arrive two months ago, I think it was supposed to arrive six months ago. I ask you, why are these still on your books? Right. Time changes and it changes fast. The customer's needs change throughout the year, right? So the goods that you were going to serve them two months ago are not necessarily relevant in their life today. Think about that. So what happens if UPS all of a sudden shows up tomorrow on your doorstep with goods that you ordered six, eight months ago with the intent of getting them six, eight months ago? Guys, it's tying up your cash. It's affecting the way you're able to buy other inventory. It's affecting what you actually know and own and can control in your business. So here's my tip to you. As soon as you enter into a contract with any vendor, like I said online, in face to face, over the phone, print that order off, print that purchase order off and do something with it. Whether you're old school and just make a file folder system or you're entering into your point of sale system, get that data in there. We need to know the vendor, we need to know the order date, we need to know the classifications of inventory you're ordered, the quantity, the color, all that information, size, fabric, whatever, if you can do all that. But really, we need to know the cost. We, we need to know the retail price and we also need to know the cancel date. What is your very last day that you're going to allow these goods to come into your store? Why? Because your inventory has a life cycle, right? We teach an awful lot about this in retail Bootcamp and other courses in the Hub. But it's really important to make sure you're taking control of those orders. So if you order something and you are stern with the vendor and you say, look, I will not accept this past August 15th, well, then you've entered all that system into the information into your system. So on August 10th, you can go in there and say, you know what, I was supposed to receive this by the 15th. I still don't have a tracking number on it. I'm going to call the vendor. They're unable to give you a tracking number at that time. The odds are pretty low that you're actually going to have that in store on the 15th of the month. Right. So at that time, remind them these goods have got to be shipped, they've got to be received by X amount of date and then follow back up with them again. If they are unable to provide you with that confirmation, that shipping number, cancel the order. Cancel it. You know why? Because that's your money, that's your cash and it's being tied up in goods. You have no idea where they're at. You don't know if you're actually going to receive them. Right. So you're missing out on opportunity to make money. Yeah. If you hit yourself in the pocketbook, it hurts pretty hard. So when you, what do you need to do instead of allowing that vendor to sit on your money that they're not actually doing anything with? Right. Take that cash back and put it someplace else. Make sure that they are not holding onto your goods and being the bottleneck of your business. Now, for all my vendor friends out there, I know I'm not talking bad about you. I'm giving you the opportunity to make sure you're staying organized as well so that communication follows back through to the retailer. If you're a vendor watching this right now and you know you're getting close to the end of those cancel dates, I hope you're on the phone calling those boutiques or those retailers and saying, hey, any chance I can get another 10 days? We're shipping the goods, but we're a little bit behind. Can you give me another 10 days? That open communication can go so far. Right. Because in all honesty, that retailer place order with you to begin with. They probably really want your goods. All right, so back talking to you, my retailer friends asking these questions. If you can make sure you know where your cash is at, where your inventory is at, you can sell things faster. Right. It doesn't do you any good to get March type products in in October. I don't care where you live, but it's happening. I talked to many retailers that come in and have UPS or FedEx packages dropped off that are from months ago. The inventory is outdated. The, the inventory is not relevant to them at this time. But it ties up their cash, it ties up their floor space or their website space and it ties up their energy, right? And somebody has to unpack it, somebody has to hang it, steam it, merchandise it. That all costs money. And if that inventory is outdated, that costs you a lot of money. So be in control of those orders. And it all starts with how you track it. From the time you push confirm on an order, as soon as you enter into that contract, print it out. We need to know the vendor. We need to know that the type of inventory it is, obviously the color, the quantity, the classifications, all that good stuff. But we also need to know what is the last possible date you want it in your store, right? Because we all talk about inventory like bananas. As soon as you rip that tape off the box, those bananas, your inventory starts to age. So we want young inventory, right? We want lively, fresh, fun inventory that we're going to sell for profit. We don't want a bunch of brown bananas. So, guys, those are my tips to you. Don't let inventory tie up your cash. If you don't have it, you can't sell it. Be in control of your purchase orders. It all starts with you and how organized you are in your system. Guys, we'll be back with more answers to your frequently asked questions. And if you have some questions, you know, shoot them over. I get DMs all the time. I'm excited to, you know, help other retailers out. So you guys have a great day and maybe jump off this call and go check those on orders, see what might be surprising. You might might be sitting still on your books that's tying up your cash. Have a great day, guys. We'll see you next time.
