Mercury vs Relay: Banking for a Seasonal Apparel Brand

Lay out, for the next two selling seasons, exactly when each manufacturing deposit is due, what percentage of the total order it represents, and when the balance is due on delivery. Apparel production typically runs on a deposit-then-balance structure, commonly a third to half up front and the remainder before or on shipment, and until that calendar is written down in dollar terms against your actual cash position, it's easy to underestimate how far ahead you need to be funding the next season while still selling through the current one.

Route a share of each season's sales revenue into a dedicated production sub-account earmarked specifically for the next season's manufacturing deposits and balances, rather than letting it sit in general operating cash where it's easy to spend against something else before the next deposit comes due. Relay's free sub-accounts make this simple to set up and to watch build toward a known target. Mercury's structure supports the same discipline and adds an API for a brand running production planning software that tracks purchase orders and deposit schedules already.

A large deposit wired to an overseas factory involves both a wire fee and a foreign exchange margin, and those costs add up meaningfully on a six-figure production order. Get a real quote from your bank for your actual corridor and currency before a deposit is due, not after, since assuming a flat, low cost and then discovering a wider spread on the actual transfer date can throw off a tightly planned production budget by a real amount.

Because the gap between paying a manufacturing deposit and collecting on the finished goods can run many months, some brands use inventory financing or a line of credit to bridge it rather than funding the entire production calendar from their own cash. That financing is priced off the bank prime rate, currently 6.75%¹, so weigh the real cost of carrying that debt for months against simply planning production further ahead and self-funding more of it from prior-season sales instead.

Cash sitting in the production fund between the moment it's fully collected and the moment the next deposit is due is worth earning yield on rather than sitting flat. The effective federal funds rate is at 3.63%² right now, and Mercury's automated Treasury sweep captures yield near that level on cash above your working buffer, a reasonable fit for a production fund that's predictably going to sit for a stretch of weeks or months before the next deposit is due.

The riskiest moment for an apparel brand's cash position is right after a strong selling season closes, when the bank balance looks healthy but a large chunk of it is already earmarked for next season's deposit that hasn't gone out yet. Treat the production fund balance as spoken for the moment a strong season's revenue lands, not as a windfall available for a founder draw or a new hire, and revisit that discipline every season since it's the single most common way a growing apparel brand runs into a cash crunch despite genuinely strong sales.

Right after a selling season closes, check these before spending:

• Compare the bank balance to the production fund balance, and treat the fund as already spoken for rather than spendable cash.
• Confirm when next season's manufacturing deposit is due and what portion of the total order it represents.
• Verify that the revenue earmarked for the next deposit has actually arrived, instead of waiting until the deposit date.
• Get a quote for your actual wire corridor and currency, including the fee and foreign exchange margin, before the money has to move.

A brand running dedicated production management or PLM software gets more from Mercury's API, connecting bank data directly to purchase order and deposit tracking that already lives in that system. A smaller brand tracking production in a spreadsheet alongside Shopify and QuickBooks can often start with Relay, whose accounting integrations and extra checking accounts on the free plan (up to 20 per business per its pricing page) may cover the need without custom integration work.

Switching factories, whether by choice or because a supplier relationship ends unexpectedly, often means a new deposit schedule and a new set of wire details to verify, sometimes on short notice if a current factory can't fulfill a season on time. Keep the production fund's cash planning flexible enough to absorb a factory change without a full rebuild, and verify new wire instructions carefully through a second channel before sending a first deposit to any new supplier, since international wire fraud specifically targets exactly this kind of factory transition moment.

Before opening either account, write out your next two seasons' full deposit and balance schedule in dollar terms, get an actual wire and FX quote for your real production corridor rather than assuming a generic rate, and decide, before a strong season's revenue lands, exactly what share goes to next season's production fund versus what's genuinely available for other use, so that decision is made calmly rather than in the moment.