Postmortems of stalled DTC brands love to blame rising CACs. Look at the balance sheets instead. In most of the 2025 flameouts we studied, demand was fine — the brand simply couldn't fund the inventory to meet it. The killer wasn't the auction. It was the calendar.
The arithmetic
A typical import-heavy brand pays its factory 30% at PO and 70% at shipment, waits 45 days on the water, then sells through over 90 days. Cash out to cash in: 150+ days. Growing 80% year over year means financing nearly two cycles of inventory at once. That's why brands with great contribution margins still die — the margin is real, but it's parked in a container.
What the survivors did differently
They negotiated terms before rates. Moving from 30/70-at-shipment to 30/70-net-30 is worth more than a 5% unit cost reduction for a fast grower. Factories will trade price for reliability more often than founders assume.
They sold the calendar, not just the product. Preorders, waitlists, and drops aren't just hype mechanics — they're negative working capital. One footwear brand in our set funds 40% of every production run from deposits.
They killed the tail. The bottom 20% of SKUs consumed 31% of inventory dollars in the median brand we analyzed, at half the turn rate. Cutting them financed the growth of the winners without a dollar of new capital.
Demand is a marketing problem. Weeks are an operations problem. In this cycle, the operators who manage weeks are the ones still growing.