Inventory how-to

How to plan inventory when suppliers require deposits

Treat deposit terms as part of your lead time planning, not a separate problem.

Short answer: Treat deposit terms as part of your lead time planning, not a separate problem. Order earlier so the cash you tie up in deposits lines up with when you actually need stock, and keep a running tally of what is on order so you don't double-order while waiting for goods.

Why deposits change your timing

A deposit does not change how long the supplier takes to make and ship the goods. But it does add a step before production starts: you have to approve the order, pay the deposit, and wait for the supplier to confirm before the clock on lead time even begins. If you place the order at the last safe moment, the deposit step can push your delivery past your reorder point.

Build this into your order-by date. If your supplier needs a 20 percent deposit before production, add the time it typically takes you to pay and get confirmation (even a day or two) on top of the normal lead time. Some stores round this up to a few extra safety days specifically for deposit-based suppliers.

Separate cash planning from stock planning

Stock planning tells you when to order and how much. Cash planning tells you when you need the money. Keep both visible. A common mistake is ordering the right quantity at the right time but not having deposit cash ready, which delays the order anyway and defeats the purpose of planning ahead.

Keep a simple list per supplier: deposit percentage, when the balance is due (on shipment, on delivery, net 30), and typical total order value. Review it before you approve a purchase order so there are no surprises.

Track on-order stock carefully

Once you have paid a deposit and placed the order, that stock is committed even though it has not arrived. Make sure your reorder quantities subtract what is already on order, otherwise you risk over-ordering the same SKU while the deposit-based order is still in transit.

Step by step

  1. List each supplier's deposit percentage and balance terms in one place.
  2. Add your typical deposit approval and payment time to that supplier's lead time.
  3. Recalculate the order-by date using lead time plus safety days plus deposit delay.
  4. Confirm deposit cash is available before you approve the purchase order.
  5. Mark the order as "on order" immediately after paying the deposit so it is excluded from future reorder suggestions.
  6. Track the balance due date separately so you are not caught off guard when goods ship.
  7. Review deposit suppliers monthly, since terms can change with order size or season.

Worked example

Say you sell a desk lamp at 6 units a day. Your supplier's lead time is 30 days, but they also require a 20 percent deposit and typically take 3 days to confirm the order once you pay. You treat that as 33 days of effective lead time. With 10 safety days, your reorder point is 6 x (33 + 10) = 258 units. If you currently have 300 units on hand and nothing on order, you are not yet at the reorder point, so you hold off. Once on-hand stock drops to 258, you place the order and pay the deposit right away, since any delay in payment adds directly to your risk of running out.

How SteadyShelf helps

SteadyShelf calculates order-by dates from each supplier's lead time and safety days, so you can pad the lead time field to cover typical deposit approval delays. It does not track deposit percentages, payment due dates, or landed cost, so you will need to manage the cash side of deposits yourself, outside the app.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

SteadyShelf is launching on the Shopify App Store. Join early access to get the install link first.

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FAQ

Can SteadyShelf split a purchase order into a deposit invoice and a balance invoice?

No. SteadyShelf drafts and emails one purchase order to the supplier. Deposit and balance invoicing is handled outside the app, typically by the supplier or your accounting process.

Should I increase safety days for every supplier that requires a deposit?

Only if the deposit step reliably adds delay before production starts. If you can pay deposits same-day and confirmation is fast, a day or two of extra safety stock is usually enough rather than a large across-the-board increase.

Let SteadyShelf do this math for every SKU

Order-by dates per supplier, seasonal forecasts and draft POs for your Shopify store. $29/month after a 30-day free trial.

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