Fueling Retail Growth: How P/O Financing Helped a Sauce Brand Deliver on a Major Costco Order

The Situation

A growing packaged goods company specializing in Indian-inspired sauces had recently secured a purchase order from Costco. With ambitious growth plans—scaling from $2 million to $15 million by 2026—the company expanded its presence in major retail chains, including Sprouts and Whole Foods. However, to fulfill the Costco order, they needed immediate capital to manage production costs. Their manufacturing partner required 50% upfront and the remaining balance before shipping, creating a cash flow gap that needed to be bridged quickly. Additionally, outstanding invoices of $100,000 further constrained their ability to finance the order. 

The Solution

SouthStar Capital provided a $250,000 Purchase Order (P/O) Financing Facility to ensure the company could meet Costco’s order requirements. This financing enabled them to secure the necessary production funding for their co-manufacturer, ensuring the sauces were prepared within the required eight-week timeline. Additionally, the structure of the financing allowed them to continue scaling operations while managing their existing cash flow obligations.

The Result

With SouthStar’s support, the company successfully fulfilled its Costco order without disruption. The funding allowed for seamless production, timely shipment through their 3PL provider, and continued expansion in the retail space. By leveraging this financing, the company strengthened its supply chain relationships and positioned itself for larger purchase orders, including potential bulk sauce offerings under Costco’s Kirkland brand.