CASE STUDY: Cash Flow Solution for a High-Volume Shopify Store

An established Shopify entrepreneur operating an online automotive accessories store was generating approximately $200,000 in monthly sales, shipping around 10,000 orders per month to customers globally.

The business relied on paid advertising to acquire customers, and a China-based drop-shipping partner (such as https://www.cjdropshipping.com/) to fulfil orders efficiently at scale.

Cash Flow Solution for a Shopify Store

The Business Challenge

The business operated on thin but stable margins and required cash to move through the system smoothly.

At a high level, the monthly cash flow profile looked like this:

• Average item price: $20

• Monthly turnover: $200,000

• Product and shipping costs: ~40%

• Advertising spend (Meta, Google): ~40%

• Operating margin before overheads: ~20%

Two external changes created an immediate cash flow squeeze:

Firstly, to reduce the incidence of fraud, Meta and Google moved the business from monthly billing to weekly ad payments, requiring cash to be paid earlier than before.

Secondly, to minimise fraud, PayPal also temporarily restricted access to settlement funds following a "routine" spike in customer refund activity. While this review was underway, funds were unavailable for up to four (4) weeks, even though orders continued (and is required) to be shipped.

At the same time, the business faced ongoing cash flow pressures:

• The overseas supplier required full upfront payment before shipping goods.

• Around 5–6% of orders were subject to chargebacks, meaning the business refunded money after products had already shipped (costs that could not be recovered).

• A small, remote support team operated across four time zones to manage customer enquiries 24/7 and reduce chargebacks (wage cost pressure)

With costs due immediately but revenue temporarily delayed, these factors combined to create a sudden and significant cash flow crunch for the Shopify entrepreneur.

The Funding Solution

To address the immediate cash-flow pressure created by platform policy changes, the entrepreneur explored non-bank funding options designed specifically for high-volume eCommerce businesses, where repayments flex with sales rather than relying on property security.

These funding options included:

1. Revenue-Based Finance (RBF) / Merchant Cash Advance

Where repayments are linked to a percentage of future sales, rather than fixed monthly instalments. Designed for Shopify, PayPal, Stripe and ad-driven businesses, where cash flow timing is the main issue.  These facilities are commonly used as fast liquidity bridges, rather than long-term debt.

2. Trade Finance

A secondary option involved funding the upfront payments required by the overseas dropshipping supplier. Specialist lenders fund supplier invoices or inventory purchases where transaction volumes are consistent and supplier documentation is strong, though it is more challenging in a pure drop-shipping model where inventory is not held locally.

3. Short-Term Working Capital Line

A small unsecured working capital facility was also considered to smooth operational timing gaps with typical limits of $50,000 to $150,000. This can be used to manage weekly advertising payments, wage payments and short-term supplier prepayments

Potential Benefits

For high-volume eCommerce businesses, cash flow stress is often caused by payment timing, not lack of demand or profitability.

Multiple cash flow funding solutions allows the Shopify business to:

• Continue paying suppliers and advertising platforms on time

• Maintain sales momentum during temporary platform disruptions

• Avoid forced slowdowns or reputational damage with customers

• Resume normal cash flow once settlement cycles stabilise

Why This Works

Even a well-running Shopify store can face cash flow delays. If funds aren’t available to pay suppliers or advertising platforms:

• Orders may be delayed, leading to unhappy customers and negative online reviews.

• Accumulating negative reviews can affect Search Engine Optimisation (SEO) and reduce organic traffic

• Advertising accounts on Meta or Google could be restricted, limiting new leads and customer acquisition.

• Payment platforms like PayPal may place additional hold on merchant funds while reviewing activity further worsening the cash flow crunch

  
  

By addressing cash flow proactively, the business can continue operations, protect its reputation, and maintain customer trust.

Short-term funding can bridge this gap, helping the Shopify entrepreneur to continue business as usual: shipping orders, maintain advertising, and manage customer enquiries while cash flow cycles normalise. The funding options provide flexibility and stability in periods of temporary disruption.

Once platform payment cycles stabilise and cash flow normalises, the entrepreneur may choose to refinance into a secured loan product later to reduce borrowing costs.

Cash Flow Solution for a High-Volume Shopify Store

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DISCLAIMER:  Case studies are illustrative only and may be hypothetical or partially fictitious. Details may be modified to preserve confidentiality and should not be relied upon as a representation of any actual client outcome. Finance options are subject to individual lender credit criteria, approval, and applicable terms and conditions. This content is general information only and does not constitute financial, legal, tax, or accounting advice. Our firm provides business consulting and finance broking services only and recommends that readers seek independent professional advice tailored to their specific circumstances.