The CCC indicates, how fast a company can turn its warehouse stock (or other outgoing payments) back into incoming payments cash.
The simple rule is: The shorter a company can keep the CCC, the better its liquidity. This is a real challenge, but especially in e-commerce it can be very successful strategy. Companies like Amazon even have a negative cash conversion cycle. This means that Amazon will pay its suppliers only after Amazon has received money from their clients through online sales.
The handling of warehouse stock is very important to the cash flow as well. Although a good warehouse stock guarantees short delivery times for the customer, it causes ongoing costs. The goods in stock are ‘dead capital’ and depending on when the suppliers have to be paid, long term storage will negatively affect your cash flow and working capital.