A product brand pays for stock months before it is paid by customers: with KoreanOEM you pay a 50% deposit when you order and 50% before shipment, and a first order with a library formula usually reaches you about 6 to 8 weeks after the deposit by air, or about 9 to 12 weeks by sea. Plan cash for that gap plus freight, duty and launch marketing, then reorder when your stock falls to the reorder point: the demand you expect during the reorder lead time plus safety stock. Track weeks of cover every week, and place the next order before you think you need it.
Why product brands run short of cash
A profitable skincare brand can still run out of money. The reason is timing. You pay your manufacturer, your forwarder, customs and your warehouse before the first customer pays you, and when sales grow you have to pay for the next, bigger order while the last one is still selling. The time between paying for stock and getting the money back from customers is called the cash conversion cycle. The longer it is, the more cash you need to grow.
Three numbers decide how much cash you need: how much you pay before stock arrives, how many weeks pass until sales pay it back, and how early you must pay for the next order. This guide shows how to plan all three. For the cost side of each unit, see the pricing guide; for launch costs outside stock, what it costs to start a skincare line.
From deposit to cash back: the timeline
Here is when money moves on a first order with KoreanOEM using a library formula and a stock container, shipped by air to the US. Payment terms are the same for every order: a 50% deposit, 50% before shipment, by bank wire in USD or KRW. You never pay in full before you approve a pre-production sample.
- Sample stage (before the order).
The sample box costs from USD 129 and ships in about 2 weeks, then 5 to 10 days by air. It is credited in full against your first production order. Custom formulas add a development fee (USD 399 per SKU for adjusted or fully custom), also credited.
- Week 0: deposit.
You approve the sample and the written quote and pay 50%. Production starts after sample approval and takes about 4 to 5 weeks (4 to 6 with a custom formula). Stock packaging takes 1 to 2 weeks and runs alongside; custom packaging takes 4 to 6 weeks and can set the pace.
- Weeks 5 to 6: QC, documents and balance.
Quality control and documents take about 1 week. You pay the other 50% before the goods leave, and you book freight from Incheon (prices are FOB Incheon).
- Weeks 6 to 8: freight, duty, receiving.
Air freight takes 5 to 10 days, sea about 4 to 6 weeks. You pay freight, duty and customs broker fees around arrival, then your 3PL's receiving fee.
- Weeks 7 to 9 onward: sales and payouts.
Your store, Amazon or TikTok Shop pays out on its own schedule, usually days to a couple of weeks after each sale. Wholesale accounts may pay 30 to 60 days after delivery.
- Cash back.
You get your first-order cash back once the margin on units sold, after fulfillment and marketing, has covered the stock, freight, duty and launch spend. In the example below that takes about 15 to 16 weeks from the deposit.
Pre-orders can shorten the gap, but in the US the FTC's Mail, Internet, or Telephone Order Merchandise Rule requires you to ship within the time you state, or within 30 days if you state none, or else to notify buyers and offer a refund. Plan pre-order dates from the lead times below, not from hope.
Lead times from Korea
The lead time is the time from your order to stock you can sell. These are KoreanOEM's published lead times; your forwarder adds the door-to-door detail for your port.
| Step | Typical time at KoreanOEM | What can make it longer |
|---|---|---|
| Written quote | 1 to 2 business days | Unusual formulas or packaging |
| First lab samples | About 2 to 4 weeks; revisions 10 to 14 days per round | More revision rounds |
| Packaging | 1 to 2 weeks (stock), 4 to 6 weeks (custom) | Custom decoration, new suppliers |
| Production | About 4 to 5 weeks after sample approval (4 to 6 custom) | Late artwork or label approval |
| QC and documents | About 1 week | Extra tests your market needs |
| Shipping | 5 to 10 days by air, 4 to 6 weeks by sea | Customs holds, port congestion, holidays |
| Reorder | Faster than the first run, with no development step | A change to formula, label or packaging |
Add your own steps on arrival: customs entry, delivery to the 3PL, and receiving, which some warehouses take several days to complete. For Amazon FBA add the time Amazon takes to make inbound stock available. When you plan a reorder, use the slow end of each range, then add a week.
Inventory terms: sell-through, weeks of cover, safety stock
| Term | Formula | Example |
|---|---|---|
| Sell-through | Units sold in a period divided by units available at the start | 390 sold of 1,000 in 6 weeks = 39% |
| Weeks of cover | Units on hand divided by average weekly sales | 700 on hand at 80 a week = 8.75 weeks |
| Lead time demand | Average weekly sales times lead time in weeks | 90 a week for 7 weeks = 630 units |
| Safety stock | Z times the standard deviation of weekly demand times the square root of the lead time in weeks | 1.65 x 20 x 2.65 = about 87 units |
| Reorder point | Lead time demand plus safety stock | 630 + 87 = 717 units |
Two terms in the safety stock formula need a plain explanation:
- Standard deviation of weekly demand measures how much weekly sales swing. Put 8 to 12 weeks of sales into a spreadsheet and use the STDEV function. If you have no history yet, a rough start is a quarter of your average weekly sales.
- Z is the service level factor: how often you accept a stockout during a reorder cycle. 1.28 covers about 90% of cycles, 1.65 about 95% and 2.05 about 98%. Higher is safer and ties up more cash.
The formula assumes the lead time is fixed. If your lead time varies a lot (a sea shipment that can take 4 or 7 weeks), add safety stock for the variation too, or simply plan with the longest lead time you have seen.
Skincare adds one more limit: shelf life. Stock you cannot sell before marketplaces reject it is not cover, it is a write-off. Walmart's fulfillment service, for example, treats items within 60 days of their expiration date as problem inventory, and Amazon has its own expiration rules for FBA. Order quantities you can sell well within the shelf life; see shelf life, PAO and preservatives.
The reorder point, step by step
- Measure weekly sales per SKU.
Use units, not revenue, and separate each channel. A spike from one creator video is not your run rate.
- Write down your reorder lead time.
From the day you approve the reorder to the day stock can ship to customers: production, QC, freight, customs and receiving. For a KoreanOEM reorder by air, about 6 to 7 weeks is a safe planning figure; by sea, plan 10 to 12 weeks.
- Calculate safety stock.
Use the formula above. Round up.
- Set the reorder point.
Lead time demand plus safety stock. When units on hand (plus any order already on the way) fall to that number, place the order.
- Decide the order quantity.
Enough to cover the time until the following reorder, usually 12 to 26 weeks of sales, capped by shelf life, cash and storage cost. Check the next price break; at KoreanOEM the unit price is about 20% lower at 1,000 units, 35% at 3,000, 38% at 5,000 and 40% at 10,000 than at 500.
- Book it early.
Send the reorder request a week before you hit the point if a holiday or peak is coming. Confirm label and packaging stock at the same time, because a missing label run delays the whole order.
- Review every week.
Update weekly sales, weeks of cover and the reorder point every Monday. It takes 10 minutes in a spreadsheet.
Seasonality and peak planning
- Fourth quarter. Black Friday, Cyber Monday and holiday gifting lift skincare sales in most Western markets. Stock for November has to leave Korea by early October at the latest by sea, and Amazon charges higher monthly storage fees from October to December, so send FBA stock close to the peak and keep the rest at your 3PL.
- Marketplace events. Amazon's summer Prime Day and other platform sale days can multiply sales for a few days. Plan the extra units into your reorder, and do not count the spike in your normal weekly average.
- Korean holidays. Factories, banks and logistics in Korea pause for Seollal (Lunar New Year, January or February) and Chuseok (September or early October). Expect several days of closure plus slower weeks around them. Ask us for the exact dates when you plan an order.
- Season of the product. Sunscreen and oil-control products sell more in summer; rich creams and barrier care in winter. Hemispheres differ: Australia's summer is the US winter.
- Freight peaks. Sea freight rates and transit times can rise before Western holidays and around Lunar New Year. Ask your forwarder before you plan.
Minimum order vs cash: how much to buy
A bigger run lowers the unit price but ties up more cash for longer. At KoreanOEM, 1,000 units cost about 1.6 times the cash of 500 units (twice the units at about 20% less each), and 3,000 units cost about 3.9 times the cash of 500 (six times the units at about 35% less). Freight per unit also falls as the shipment grows.
| Choose the smaller run when | Choose the larger run when |
|---|---|
| The product is new and demand is a guess | You have at least 8 to 12 weeks of steady sales data |
| You launch several SKUs at once | One hero SKU makes most of your sales |
| Your cash would fall below 3 months of fixed costs | You can pay for it and still keep a cash buffer |
| Shelf life or expiry rules limit how long you can sell | You will sell the units well within the shelf life |
| You may change the label or claims soon | Label, claims and packaging are final |
A good pattern for a first order is the minimum run for each SKU, a reorder of the best seller at the next price break, and new SKUs only once the first line sells. Our post on low MOQ private label skincare covers minimums, and hero product strategy covers how many SKUs to launch.
Financing inventory
Most first runs are funded by the founder's own savings or pre-sales. Once you have sales history, more options open. We describe how each works; costs vary by lender and your history, so compare the total amount you repay, not only the headline rate.
| Option | How it works | Watch for |
|---|---|---|
| Pre-orders and crowdfunding | Customers pay before you produce | Ship dates you can keep; refund rules such as the FTC mail order rule |
| Bank loan or line of credit | A bank lends against your business and often a personal guarantee | Collateral, time to approval |
| Government-backed small business loans | In the US, the SBA guarantees loans made by lenders, and its microloan program lends up to $50,000 through local nonprofit lenders | Paperwork, eligibility |
| Inventory financing | A lender advances money against the stock you buy or hold | Valuation of the stock, fees, storage requirements |
| Purchase order financing | A lender pays the supplier for a confirmed customer order | Usually needs a creditworthy retail buyer |
| Shopify Capital | Offered by invitation in the Shopify admin. You receive a lump sum for a fixed fee and repay a set percentage of daily sales until the total is paid, with no fixed deadline (loans or cash advances depending on the country) | The fixed fee is due however fast you repay |
| Amazon Lending | Eligible sellers see invitations from third-party lenders in Seller Central, with offer amounts, rates and terms | Repayment from your Amazon payouts; terms per lender |
| Revenue-based financing | A funder advances cash and takes a share of revenue until a fixed cap is repaid | The total cap, and how a slow month affects you |
Do not borrow against an order you have not tested. Finance the reorder of a product that sells, not the first run of an idea. More ideas for a lean start are in starting a skincare line with no money.
Worked example: a 13-week cash flow
A 13-week cash flow lists every expected payment in and out, week by week, for one quarter. It shows your lowest cash point before you reach it. Here is an example for one 30 mL serum, 1,000 units, made by KoreanOEM from a library formula and shipped by air to a 3PL in the US. All amounts are our own rounded examples, not a quote, except the payment terms and the USD 150 MoCRA listing fee, which are KoreanOEM's.
| Week | What happens | Units sold | Cash in | Cash out | Closing cash |
|---|---|---|---|---|---|
| 1 | Deposit 50% ($2,000), MoCRA listing (USD 150) | 0 | $0 | $2,150 | $12,850 |
| 2 to 4 | Production | 0 | $0 | $0 | $12,850 |
| 5 | Creator samples and content | 0 | $0 | $300 | $12,550 |
| 6 | QC, balance 50% before shipment, content | 0 | $0 | $2,300 | $10,250 |
| 7 | Arrival: freight $900, duty $500, receiving $150, storage $150, content $300 | 0 | $0 | $2,000 | $8,250 |
| 8 | Launch | 40 | $0 | $1,090 | $7,160 |
| 9 | First payout | 50 | $1,464 | $1,325 | $7,299 |
| 10 | Selling | 60 | $1,830 | $1,560 | $7,569 |
| 11 | Selling | 70 | $2,196 | $1,795 | $7,970 |
| 12 | Stock 700 falls below the reorder point (717): reorder 1,500 units, deposit $3,000 | 80 | $2,562 | $5,030 | $5,502 |
| 13 | Selling; reorder in production | 90 | $2,928 | $2,265 | $6,165 |
What the example teaches:
- $7,840 goes out before the first dollar comes in, eight weeks after the deposit. That is the minimum cash this launch needs, before any buffer.
- The lowest point comes with the reorder, not the launch. In week 12 the brand pays a $3,000 deposit while the first stock is still selling. The $3,000 balance falls due around week 16 or 17, before the reorder arrives.
- Reorder after only 5 weeks of sales. With a 7-week reorder lead time and sales of 90 a week, the reorder point is 717 units, so the brand orders when 700 of its 1,000 units are still in stock. Waiting for the shelf to look empty would mean several weeks with nothing to sell.
- Cash back takes about 4 months. Each unit leaves $13.10 after payout, fulfillment and ads. It takes about 600 units to repay the $7,840 spent before launch, which at this pace is around week 15 or 16.
- Ads are the biggest lever. At $10 instead of $15 per unit sold, the brand ends the quarter about $1,950 better off. Reviews, repeat buyers and organic content move this number most.
Build your own version with your quotes. The budget planner gives the product side, and a startup budget calculator is on the way.
- Planning cash for the first order only, then having no money for the reorder deposit while the first stock still sells.
- Reordering when the shelf looks empty instead of at the reorder point, which guarantees a stockout of several weeks.
- Using the fast end of every lead time range and forgetting customs, receiving and holidays in Korea.
- Counting a one-off viral spike as the normal weekly run rate and overbuying.
- Buying a large run for the price break without checking shelf life and marketplace expiry rules.
- Ignoring wholesale payment terms: a shop that pays in 60 days is cash you do not have yet.
- Borrowing for the first run of an untested product.
- Holding all stock in Amazon FBA in the fourth quarter, when storage fees are highest.
- A 13-week cash flow, updated every week
- Cash for the first order, freight, duty, receiving and launch marketing, plus a buffer
- Cash set aside for the first reorder deposit before you launch
- Written lead times per step, with the slow end used for planning
- Weekly sales per SKU and channel in units
- Weeks of cover per SKU, checked every Monday
- Safety stock and reorder point per SKU
- Order quantities checked against shelf life and expiry rules
- Korean holidays and your peak season marked in the calendar
- Payout schedules of every sales channel written down
- Label and packaging stock confirmed for the next run
- A financing option compared on total repayment, if you need one
How KoreanOEM helps
Predictable timing is half of cash planning. We publish ours and keep the payment split fair.
- 50% deposit, 50% before shipment, by bank wire in USD or KRW, never full prepayment before you approve a pre-production sample.
- Low first runs: from 500 units for serums, creams, ampoules and essences, and 1,000 for toners and cleansers, so the first order does not take all your cash. See fees and minimums.
- Published lead times and a production schedule in My page, so you can plan the reorder point with real dates.
- Faster reorders with the same formula and packaging, and price breaks at 1,000, 3,000, 5,000 and 10,000 units when you are ready to scale.
Frequently asked questions
How much cash do I need for a first skincare order?
What are normal payment terms with a skincare manufacturer?
How do I calculate the reorder point for skincare?
How do I calculate safety stock?
How long does a reorder from Korea take?
How many weeks of stock should a skincare brand hold?
Is it better to order 500 or 1,000 units?
How can I finance skincare inventory?
Sources
- Shopify Help Center: Shopify Capital merchant cash advance (how remittance works)
- Shopify Help Center: Shopify Capital
- Amazon: Guide to small business loans and financing for Amazon sellers
- U.S. Small Business Administration: Microloans
- FTC: Business guide to the Mail, Internet, or Telephone Order Merchandise Rule
- Walmart Marketplace Learn: Troubleshoot rejected or returned WFS inventory
- Amazon: Fulfillment by Amazon costs (storage and aged inventory)
- USTR: Action in the forced labor Section 301 investigations (July 2026)
Checked against these sources in October 2026. Rules and fees change; check with the authority or your importer before you sell.