order from your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops significantly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you

Before you order your first batch of inventory from the supplier, some of that inventory should already have been pre-sold, i.e. you have a written and signed order from your customers or retailers already. When you have cartons of products crossing the Pacific or Atlantic Ocean, those importers who already have buyers and signed contracts for those products sleep a lot better than those who will have to look for buyers when the shipment arrives.

But what exactly should that number be? Should 100% of it have been pre-sold? Or should it be 50% or even 25%? If you have too much uncommitted inventory sitting on shelves, it will not just tie up your cashflow but cost you mental stress and anxiety as well. If you don't have enough ready inventory on your shelves, you may not be able to fulfill new orders in a timely fashion. So what is a good balance?

There's no one-size-fit-all answer. It depends on a number of factors. By considering the five factors I listed below, you will increase your chance for success.

Factor #1. Cost of goods. I import Bali Sandals and sell them between $25 to $39. The cost of each pair of sandals to me is between $4 and $5. So, even if I only sell off 50% of my inventory, I make a profit. In other words, if your cost of goods is very low compared to selling price, you'll be ok with a lower pre-sold percentage. If your cost of goods is higher, you may want to have pre-sold a large percentage before you actually ship the inventory to the U.S.

Factor #2. Ease/difficulty locating buyers. As you pound the pavement to get your initial orders before you actually import your inventory, you get an idea how easy or how difficult it is to find buyers for your products. For example, I took my Bali Sandals to 10 boutiques and 7 ordered. That said to me the product was so unique they were easy to sell. So I was comfortable carrying more uncommitted stock. What is your experience in your initial attempts selling your product? Let that guide you how much uncommitted stock you will be comfortable with.

Factor #3. Seasonality. If you sell a seasonal product, I would not want to carry too much 'uncommitted' stock. For example, if you are selling beach products, you have a short 3 summer months to sell them. If you product is year-round and not perishable, I have more leeway selling them off my shelves so I would be ok with a higher ‘uncommitted' percentage of stock.

Factor #4. Industry standard delivery schedule. Some markets accept long delivery schedule. For example, in the women's apparrel market, bags or shoes business, retailers have been trained to order 3 to 4 months ahead. They order their Fall merchandise in July and they order their Spring merchandise in October.November. In a situtation like that, there is no need to carry ‘uncommitted' stock. When your clients are willing to accept long delivery times, you can order from your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops significantly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you

don't have enough ready inventory on your shelves, you may not be able to fulfill new orders in a timely fashion. So what is a good balance?

There's no one-size-fit-all answer. It depends on a number of factors. By considering the five factors I listed below, you will increase your chance for success.

Factor #1. Cost of goods. I import Bali Sandals and sell them between $25 to $39. The cost of each pair of sandals to me is between $4 and $5. So, even if I only sell off 50% of my inventory, I make a profit. In other words, if your cost of goods is very low compared to selling price, you'll be ok with a lower pre-sold percentage. If your cost of goods is higher, you may want to have pre-sold a large percentage before you actually ship the inventory to the U.S.

Factor #2. Ease/difficulty locating buyers. As you pound the pavement to get your initial orders before you actually import your inventory, you get an idea how easy or how difficult it is to find buyers for your products. For example, I took my Bali Sandals to 10 boutiques and 7 ordered. That said to me the product was so unique they were easy to sell. So I was comfortable carrying more uncommitted stock. What is your experience in your initial attempts selling your product? Let that guide you how much uncommitted stock you will be comfortable with.

Factor #3. Seasonality. If you sell a seasonal product, I would not want to carry too much 'uncommitted' stock. For example, if you are selling beach products, you have a short 3 summer months to sell them. If you product is year-round and not perishable, I have more leeway selling them off my shelves so I would be ok with a higher ‘uncommitted' percentage of stock.

Factor #4. Industry standard delivery schedule. Some markets accept long delivery schedule. For example, in the women's apparrel market, bags or shoes business, retailers have been trained to order 3 to 4 months ahead. They order their Fall merchandise in July and they order their Spring merchandise in October.November. In a situtation like that, there is no need to carry ‘uncommitted' stock. When your clients are willing to accept long delivery times, you can order from your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops significantly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you

ntage before you actually ship the inventory to the U.S.

Factor #2. Ease/difficulty locating buyers. As you pound the pavement to get your initial orders before you actually import your inventory, you get an idea how easy or how difficult it is to find buyers for your products. For example, I took my Bali Sandals to 10 boutiques and 7 ordered. That said to me the product was so unique they were easy to sell. So I was comfortable carrying more uncommitted stock. What is your experience in your initial attempts selling your product? Let that guide you how much uncommitted stock you will be comfortable with.

Factor #3. Seasonality. If you sell a seasonal product, I would not want to carry too much 'uncommitted' stock. For example, if you are selling beach products, you have a short 3 summer months to sell them. If you product is year-round and not perishable, I have more leeway selling them off my shelves so I would be ok with a higher ‘uncommitted' percentage of stock.

Factor #4. Industry standard delivery schedule. Some markets accept long delivery schedule. For example, in the women's apparrel market, bags or shoes business, retailers have been trained to order 3 to 4 months ahead. They order their Fall merchandise in July and they order their Spring merchandise in October.November. In a situtation like that, there is no need to carry ‘uncommitted' stock. When your clients are willing to accept long delivery times, you can order from your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops significantly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you

itted' stock. For example, if you are selling beach products, you have a short 3 summer months to sell them. If you product is year-round and not perishable, I have more leeway selling them off my shelves so I would be ok with a higher ‘uncommitted' percentage of stock.

Factor #4. Industry standard delivery schedule. Some markets accept long delivery schedule. For example, in the women's apparrel market, bags or shoes business, retailers have been trained to order 3 to 4 months ahead. They order their Fall merchandise in July and they order their Spring merchandise in October.November. In a situtation like that, there is no need to carry ‘uncommitted' stock. When your clients are willing to accept long delivery times, you can order from your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops significantly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you

order from your supplier after you have a signed order from your customer. You probably would not want to take this on-demand model to the extreme though because the per piece overseas shipping drops significantly if you can ‘bunch-up' your shipping to larger volumes.

Factor #5. Marketing channels. If you sell not just to wholesalers but have multiple marketing channels, it's like having insurance if one particular channel doesn't pan out. I sometimes risk carrying extra uncommitted inventory so I can test out new marketing channels.

By now you will agree that the ratio of committed versus uncommitted inventory is not carved in stone. Consider these factors and use them to analyze your situation so you arrive at a balance that works for you.

If you miss in your first year, don't be discouraged. Time is the best teacher. With time, you will get to know your market, your buyers, your products and you will know that number at the top of your head.