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Settlement Cycle (Marketplace Payout Cycle)

Settlement cycle is the time between a sale and the moment the marketplace releases cash to the seller. Examples: biweekly payouts, rolling reserves, delayed release of funds.

Why It Matters

•It is the e-commerce equivalent of DSO.
•Sellers often ignore payout delays and focus only on revenue.
•Settlement rules differ across marketplaces and significantly affect liquidity.

Connection to Capital

Longer settlement cycles delay cash inflows, increasing working capital requirements and extending the CCC.

Related Terms

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