Marketplaces settle 7 to 14 days after dispatch. Your supplier wants payment in a week and your ad spend is debited daily. The gap between those two dates is the overdraft you must carry — and most sellers discover it on the day the payment fails.
Direct Summary: The settlement gap is the distance between paying suppliers and receiving marketplace remittance. At 50 orders a day and ₹799 average order value, daily GMV is ₹39,950 against roughly ₹20,000 of daily outflow (₹14,000 COGS plus ₹6,000 ad spend). With a 10-day payout hold and 7-day supplier credit, peak cash deficit reaches about ₹2,00,000 on day 10, recovering to positive around day 21. Extending supplier terms from 7 to 21 days cuts the peak deficit by roughly 65% — the single highest-leverage change available, and cheaper than any overdraft.
Cumulative cash position at five-day intervals, with the crunch day highlighted.
| Day | Cumulative Outflow | Cumulative Payout | Net Cash | Status |
|---|
At 50 orders/day and ₹799 average order value, daily GMV is ₹39,950 against ₹20,000 of daily outflow (₹14,000 COGS plus ₹6,000 ad spend). With a 10-day payout hold and 7-day supplier credit, peak cash deficit reaches ₹102,000 on day 10, recovering to positive on day 22. Net free cash flow over 30 days is +₹74,860. Extending supplier terms from 7 to 21 days would cut the peak deficit by roughly ₹66,300.
| Day | Cumulative outflow | Cumulative payout | Net cash | Status |
|---|---|---|---|---|
| Day 5 | ₹30,000 | ₹0 | −₹30,000 | Negative |
| Day 10 | ₹102,000 | ₹0 | −₹102,000 | Negative |
| Day 15 | ₹202,000 | ₹144,215 | −₹57,785 | Negative |
| Day 20 | ₹302,000 | ₹288,430 | −₹13,570 | Negative |
| Day 25 | ₹402,000 | ₹432,645 | ₹30,645 | Surplus |
| Day 30 | ₹502,000 | ₹576,860 | ₹74,860 | Surplus |
/working-capital-simulator?orders=50&aov=799&cogs=280&ads=180000&terms=7&delay=10&rto=18
Three clocks run at different speeds, and the gap between them is what you are financing.
Meta, Google and Amazon PPC debit daily. This cash leaves before a single order has shipped, and it is the fastest-moving of the three clocks.
COGS leaves on your supplier's schedule: immediately on advance payment, or on day 7, 15, 21 or 30 if you have negotiated credit. This is the only clock you control.
The marketplace remits roughly a week or two after dispatch, less commission, fees, TDS and TCS. This is the clock that creates the deficit.
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