Cycle terms andthe margin model.
Every cycle is priced against three scenarios. The supplier price is fixed at authorisation. The fee stack is itemised. The realised margin is divided at settlement against rules written into the master agreement, the same rules every time.
The deal book shows three numbers for every cycle: a conservative scenario, a base case and an optimistic scenario. They are not forecasts. They are documented assumptions about sell-through, channel mix and exception load, with the working shown.
Slower sell-through, higher exception allowance, conservative channel mix. The bottom of the realistic range. The figure the desk uses to decide whether a cycle clears at all.
The desk’s anchored expectation given the supplier history, the category data, the destination market and the cycle window. The figure members are asked to read most carefully.
Stronger sell-through with all channels firing. The top of the realistic range. The figure that reminds everyone the upside exists without being the figure decisions are anchored on.
Every cycle has the same itemised fee stack. There are no hidden lines. Every fee is associated with a service and a measured cost. The full fee stack is published with the deal book and reproduced on the settlement statement.
The supplier proposes a price in the brief. The desk reviews it against three references: the supplier’s prior cycles where they exist, the category benchmark from comparable suppliers, and the destination market’s wholesale clearing range. Where the proposed price is outside the workable corridor, the desk says so before authorisation. We do not authorise a cycle and renegotiate later.
Where the supplier holds a unique origin, certification or capacity, the price corridor is wider. Where the category is competitive and many comparable suppliers exist, the corridor is tighter. The principle is the same: the price has to clear the cycle at the conservative scenario, otherwise the cycle does not authorise.
The supplier’s earning is the agreed supplier price, paid against the milestone calendar, full on completed delivery to the hub. Where channel resale exceeds the base case, the supplier does not share in the upside, the platform’s commercial design directs cycle upside to the members who purchased the goods. Where channel resale falls below the base case, the supplier’s price is still paid in full on delivery, the cycle deficit is borne against the exception reserve and, if exhausted, against the platform’s fee.
The reasoning is operational: a supplier who has delivered the goods on time and on specification has performed. We do not penalise a supplier for downstream demand variance. We do hold the supplier accountable for delivery, specification and timeliness, the four review domains documented in the scorecard article.
Every milestone from authorisation to settlement and what the supplier does at each one.
Milestone calendar, what triggers each release and the supplier settlement statement.
A worked walkthrough of a published margin model with all three scenarios.
Same fee stack.Every cycle.
The economics are the same for the next cycle as the last. That is the point of the model.