In many Kiwi businesses, stock is sitting quietly in the background, looking harmless. But in reality, that stock is your cash. It’s your money tied up in raw materials, finished goods, and packaging just sitting there. And when cash is tight, this can become a real issue.
In this blog, we’re diving into how New Zealand businesses can manage stock more effectively to improve cash flow. Whether you’re importing products, manufacturing locally, or just want tighter control over what’s on your shelves, this guide will give you some good thinking points to apply in your business.
Stock is cash in disguise
Stock isn’t just stuff. It’s cash you’ve already spent.
If you’ve got $200,000 worth of product on the shelf, that’s $200,000 not in your bank account. You can’t use that cash to pay suppliers, invest in marketing, or cover wages until that stock is sold and turned back into income.
So the goal isn’t necessarily to get rid of stock altogether, it’s to manage it smartly so you’re not sitting on piles of product that could be better used as working capital.
Understand what stock you actually need
Start with sales data
A good place to begin is understanding your sales levels and volumes. Break it down by product or SKU (stock keeping unit) and identify:
- Which products sell the fastest
- Which ones move slowly
- What time of year those trends occur
A seasonal business in Taupō might ramp up certain products heading into summer, while a B2B wholesaler in Auckland might need more even distribution across the year. Either way, good data helps you plan.
Watch out for lead times
If you're importing products or components, your lead times could be anywhere from a few weeks to three months or more. Often, longer lead times mean you’ll hold more stock as a buffer.
That’s understandable, especially when global shipping is still a bit patchy. But even in those cases, using your forecasted sales to guide stock levels is crucial. You don’t want to be caught out over-ordering and watching thousands of dollars sit idle on shelves.
Forecasting isn’t just for big corporates
Even small New Zealand businesses can benefit from simple forecasting.
Use what you know about your sales trends and look ahead. What will you need in 2, 4, or 12 weeks' time? What should land in your warehouse and when?
Without that forward view, you end up buying on gut feel and that’s when stock starts ballooning. Suddenly you’re dealing with a cash flow crunch.
Keep production in sync
If you manufacture or assemble anything, raw components are only part of the story. You also need to plan how quickly you turn those materials into finished goods.
Overproduction leads to the same problem: too much stock and not enough cash.
Instead, tie your production plan to realistic sales forecasts. That way, you avoid piling up finished goods you can’t move, especially critical in industries with shelf-life or seasonality concerns.
Work closely with suppliers
This is where things can get interesting - and where many Kiwi businesses could squeeze more value.
Think beyond just payment terms
Yes, it’s important to negotiate good payment terms. Whether it’s 30 or 60 days, the longer you can delay payment without penalty, the better your cash position.
But also think strategically.
If your instinct is to reduce order sizes to avoid large cash outlays, be aware that smaller orders often come with higher per-unit costs. That eats into your margin and reduces profit.
Commitment-based ordering
One way around this is to work with your supplier on a forecasted commitment.
For example:
“Hey, we’ll be drawing down 500 units a month, and we’re happy to commit to that for the next 12 months.”
You get smaller monthly shipments and lower cash requirements, while still securing a bulk-rate price because you’ve committed over the long term. Your supplier gets predictability, and you avoid inflating your unit costs unnecessarily.
That can be a win-win, especially for New Zealand importers managing currency fluctuation and freight uncertainty.
Tools and tips for better stock visibility
It’s hard to manage what you can’t see.
Make sure your inventory management system gives you:
- Clear visibility of stock levels by SKU
- Stock turn data (how quickly each product is selling through)
- Alerts or flags for overstock and understock situations
- Integration with your accounting system or dashboard so you can track value
This shouldn’t be a once-a-month spreadsheet exercise. Ideally, you’re reviewing stock as part of a weekly rhythm, looking ahead as well as reflecting back.
Define some key stock KPIs
Here are a few common inventory metrics to keep in your toolkit ⬇️
Stock turn rate:
How often stock is sold and replaced in a year. Higher is generally better, but you need to balance with availability.
Days of stock on hand (DSOH):
How many days' worth of product you’re holding based on current sales. If it’s creeping over your typical lead time, you may be holding too much.
Gross margin return on inventory investment (GMROII):
How much profit you’re making on every dollar invested in inventory.
Seasonal planning matters too
If you’re in a seasonal industry, whether that’s retail, agriculture, events, or food and beverage - managing the ramp-up and ramp-down of stock is critical.
Yes, you want enough stock on hand to meet demand when it spikes. But it’s just as important to avoid getting caught with leftover product after the season ends. That’s where discounts and margin squeeze start creeping in.
Take time in advance of each season to plan:
- What do we expect to sell?
- When do we need stock to arrive?
- How can we avoid leftover stock post-season?
Wrapping it all together: cash, stock, and control
At the heart of all this is visibility and control.
Good stock management is about more than having enough product. It’s about knowing exactly what you have, what you need, and when you need it. And it's about using your cash wisely so your business can keep growing.
By bringing together sales trends, supplier negotiations, forecasting, and regular stock reviews, you put yourself in a much stronger position. Your cash stays healthier. Your margins hold up. And your shelves carry the right products at the right time.
Final tips to get started this week
If this all sounds a bit much, start simple:
- Pull sales data from the past 3 months and identify your fastest and slowest movers
- Check current stock levels for those products
- Forecast what you’ll need for the next 4 weeks
- Talk to a key supplier about a commitment-based pricing model
- Set a 30-minute stock check into your weekly rhythm
Each small improvement adds up. And in a market where every dollar matters, that kind of attention to stock can make a real difference for your business.
Need a hand?
At RightWay, we work alongside Kiwi businesses every day to solve challenges just like this. Our team of experts can help you take control of your inventory, free up cash, and set your business up for smarter growth.
Let’s get started – reach out to the RightWay team today. We're here to help.
Disclaimer: The information provided in this article is intended for general informational purposes only and may not apply to the specific details of your business. For personalised and tailored advice, we recommend reaching out to our professional team. While we strive to provide accurate and up-to-date content on our website, RightWay assumes no responsibility for any business loss or damage that may arise from relying on the information provided.
