Total Reserve = Rolling Reserve + Dunning Reserve + Seller Performance reserve
Rolling Reserve = Seller Marketplace Exposure * Reserve Rate*Seller Marketplace Exposure is often mentioned as Exposure*
*Reserve Rate is 0-100%
Dunning Reserve = stage 2-4 dunning amount from Marketplace or Trade-in
Seller Performance Reserve = special setting when reserve is used to mitigate performance issue for partial fund release purpose
Definitions
- Credit score - provided by CreditReform in numeric value, ranging from 100 - 600.
- Very Good: 100 - 199
- Good: 200 - 299
- Moderate: 300 - 399
- Poor / Insolvent: 400 - 600
- Missing: 0
- Exposure
- Seller exposure is defined by each seller's 12month selling history, recent 90 days refund rate, and 12 month warranty rate.
5% of gmvif seller is in the first 3 months of selling and seller credit score is green.5% of recent 45 day gmv + 5% of total gmvif seller is in the first 3 months of selling and seller credit score is not green.
- Case rate = Exposure / 12‑month GMV.
- Reserve rate = % of exposure to be held as rolling reserve
Reserve Rate Calculation Logic
Reserve Rate is 100% for the first three month of selling.
Starting from month 4, Reserve Rate = Base Rate + Case Rate Adjustment + Tenure Discount
| Credit Score | Band | Base rate | Case Rate Adjustment | Tenure Discount |
|---|---|---|---|---|
| 100 – 199 | Very Good | 60% - 70% | based on threshold | based on tenure and gmv |
| 200 – 299 | Good | 70% - 85% | based on threshold | based on tenure and gmv |
| 300 – 399 | Moderate | 85% - 100% | based on threshold | based on tenure and gmv |
| 0 | Missing | 90% | based on threshold | based on tenure and gmv |
| 400+ | Poor / Insolvent | 100% | no discount | no discount |
Case Rate Adjustment
- Below 1% → −20%
- 1% – 3% → 0%
- 3% – 5% → +10%
- Above 5% → +20%
Tenure Discount
- tenure > 7 years or Strategic brands → - 50%
- 12‑month GMV > €10M and tenure > 5 years → −40%
- 12‑month GMV > €5M and tenure > 3 years → −20%
- 12‑month GMV > €1.5M and tenure > 2 years → −10%
- Otherwise → 0%
* Discount is removed if total dunning amount exceeds €50k.
100% Reserve Rate
Under these circumstances, reserve ratio will increase immediately to 100%.
- Seller credit rating increased to ≥ 400
- Seller or other source mentioned they are considering selling the business to another company
- Seller’s company VAT ID is invalid
- Seller Performance issue, specifically related to
- Delivery
- CS response time
- Other huge negative incidents after validation via internal discussion via Signal channel.
- Significant decrease in sales or stock volume
- (4 consecutive weeks of more than 15% decrease in sales or 1 week of more than 75% decrease in sales) and forecasted future 4 week sales ≤ remaining refunds
- Significant decrease in sales or stock volume