Metrics & KPIs
Cash Conversion Cycle
The number of days between paying your supplier and getting paid by your customer. Negative cycles (supplier paid after customer pays) fund growth without debt.
Cash Conversion Cycle is the number of days between when you pay your supplier and when you receive payment from your customer. Most dropshippers assume CCC is always negative (customer pays first, then supplier), but in reality it's often positive and hidden.
Typical drags on CCC:
- Shopify Payments rolling reserves: 5-30% held for 90-120 days.
- Chargeback delays: Funds pulled weeks after the sale.
- Pre-paid inventory: Any product you stock instead of dropship.
- Long shipping → refunds → chargebacks: The AliExpress trap.
Operators who scale fastest run with -15 to -30 day cycles: Shopify Payments settles in 2 days; supplier terms are net-30. That negative 28-day float becomes free working capital that funds the next month of ad spend.
Articles mentioning Cash Conversion Cycle