Business Models & Unit Economics

Container Ships and Credit Limits

Feel the hardware cash conversion cycle: you pay the factory today for units you sell next month. Learn why a profitable hardware company can die of a stockout on one side and a cash crunch on the other.

Your smart desk lamp is a hit — reviewers love it, and demand is climbing. The catch is physics: the factory wants cash up front, the container takes a month, and every unit you don't have in stock is a customer who buys something else.

Each month you place a factory order (paid in full immediately, delivered next month), set the retail price, and set the marketing budget. Order too little and stockouts throttle demand; order too much and the prepayment eats your cash. Grow the bank balance to $450,000 without ever letting it touch zero.

12 months on the clock. Initial conditions are randomized.