I have often said, one of the worst things that can happen to a physical goods start-up is to get a huge order from a single customer. Finding the working capital to pay for millions of dollars in raw materials can be nigh on impossible. Banks won't loan you the money without a track record of delivering similarly sized orders, and raising a round is an incredibly expensive way to float your receivables.
That's true for every type of business, the risk that is coming from such order is too big for any sensible company to take.
Many businesses limit order sizes for this specific reason, and in many cases will have even stricter limits as well as invoicing terms for new B2B customers.
We've seen this quite recently with GT Adv. Technologies going bankrupt when their deal with Apple pretty much took their entire pipeline.
http://www.techtimes.com/articles/17677/20141011/gt-advanced...
That seems to have been Apple's MO for some years now. I think the Palm/HP people working on the Pre lamented that whenever they found a part they wanted to use, Apple had already placed an order for the years production capacity.
I order $400,000 of goods from you. You have to make and deliver those goods to me, and I pay you 30 days after you invoiced me.
Your challenge is to come up with $X00,000 of funding at a time when it's tricky to get loans.
Your other challenge is to either hope your current suppliers can suddenly increase their capacity, or that you can find a supplier who can fill your demand.
If you're making the product you need to employ and train extra staff, and hope they fit in whatever building you have.
And you need place to store raw material, product being built, and built product ready for shipping.
Only a problem if requirement to deliver at once which I don't see why would be the case in most situations. A big order is only a problem to a problem-seeker.
