Fix the comparison boundary before calculating
Records and assumptions to align
- Reconcile platform-attributable orders, refunds, fees and retained contribution for one period. (not complete)
- Map receivable, reserve and payout timing separately from profit. (not complete)
- Choose an interruption duration and recoverable-order assumption as labelled sensitivities. (not complete)
- Price the fallback setup, duplicate operating cost, transition effort and spare capacity. (not complete)
- Name non-financial dependencies such as catalogue data, reviews, customer access and fulfilment eligibility. (not complete)
| Field | Required unit | Preferred evidence |
|---|---|---|
| affected platform orders | orders/window | completed order record or labelled scenario |
| retained contribution per order | CU/order | reconciled marketplace order cohort |
| contribution recovered through the named fallback | CU/window | observed test or labelled sensitivity |
Build a reproducible scenario
contribution exposure = affected platform orders × retained contribution per order - contribution recovered through the named fallback + incremental interruption costs
- affected platform orders
- Orders exposed during the selected interruption window (orders/window) — completed order record or labelled scenario
- retained contribution per order
- Revenue less included product, fulfilment, payment, platform and return costs (CU/order) — reconciled marketplace order cohort
- contribution recovered through the named fallback
- Only contribution supported by fallback capacity and an explicit conversion assumption (CU/window) — observed test or labelled sensitivity
Show withheld or delayed payout cash separately. Do not multiply revenue by an outage probability supplied by Margin101.
Fictional four-week interruption scenario
The business supplies the interruption window and recovery assumptions; neither is a forecast.
| Case | Declared inputs | Substitution | Result |
|---|---|---|---|
| Gross contribution exposed | 400 affected orders; 24 CU retained contribution/order | 400 × 24 | 9,600 CU |
| Fallback recovery | 120 recoverable orders; 21 CU contribution/order | 120 × 21 | 2,520 CU recovered |
| Net bounded exposure | 9,600 gross; 2,520 recovery; 800 transition/rework cost | 9,600 - 2,520 + 800 | 7,880 CU exposure |
Stress-test the uncertain inputs
| Variable | Lower case | Higher case | What it tests |
|---|---|---|---|
| Interruption window | One week | Six weeks | Tests duration concentration |
| Fallback capacity | Limited tested capacity | Pre-built capacity | Tests recoverability rather than revenue concentration |
| Payout timing | Normal dated receipt | Delayed/reserved payout scenario | Tests liquidity separately from contribution |
Stop and review when
- Platform order contribution cannot be reconciled after refunds and fees. (not complete)
- Fallback recovery is asserted without capacity or conversion evidence. (not complete)
- The cash and contribution horizons have been mixed. (not complete)
Turn the scenario into a controlled decision
- Reconcile the baseline to current records and name the evidence owner.
- Run the base case, then change one uncertain input at a time.
- Record the chosen response, approval limit, review date and stop trigger.
- Compare actual results with the original boundary before reusing the assumption.
Avoid these mistakes
- Calling all platform revenue a loss when some costs are avoided or orders recover. (not complete)
- Using an invented outage probability to create false precision. (not complete)
- Ignoring the fixed cost and management load of a fallback channel. (not complete)
Questions to resolve before approval
- Is a high platform revenue share automatically unsafe?
- No. Concentration identifies exposure, not probability or unacceptable risk. Recovery capacity, payout timing, contribution and tolerance all matter.
- Does the model value customer data or reviews?
- No. Record those dependencies qualitatively or in a separately evidenced scenario; do not hide a speculative value inside contribution.
Methodology and source boundary
- Multi-Channel Profit Comparison methodology — Margin101: Product-owned comparable channel contribution boundary.
- Cash Runway methodology — Margin101: Product-owned dated cash-floor scenario boundary.
- Channel Pricing: Protect One Product Margin — Margin101: Existing channel-cost and contribution owner; this article adds bounded dependency exposure.