Shein orders clothes in batches of 100-300 units and restocks daily based on yesterday's sales, keeping almost no inventory. It gets paid by customers before paying suppliers, giving it negative working capital that larger brands don't have.
As big as SHEIN is, and I think that, you know, there have been talk of them going IPO, they are a whatever, $26 billion top line company. As big as they are, their order sizes are between 100 to 300 units. If something sells well, they will then replenish on a daily basis. So they give you an order today and it's only based on what's sold yesterday. And if this style sells well tomorrow as well, then I'll place you another replenishment order tomorrow. They will never have any excess inventory, because you know, if they have just a couple hundred units, even if it doesn't sell, I mean, even if it doesn't sell well, they will be able to digest 200 units, but if it sells well, they will buy another 200 every single day for as long as there is demand. I bet that they actually have a negative working capital, which means they actually receive money from their consumers before they have to pay their suppliers, and that's even, you know, just at just 14 days, whereas a lot of, you know, foreign brands, you know, American brands or so, will require at least 30, if not like 60 days.
