Marketplace Commission
The percentage of a sale a marketplace charges on every successful transaction. Amazon: 8-15%. Etsy: 6.5%. eBay: 12.9%. Local marketplaces vary. Directly impacts gross margin.
In practice
Marketplace commission is the 'rent' you pay to enter the digital mall. Sometimes it's worth it — massive traffic with no CAC. Sometimes it's not — margin after commission turns negative. Always calculate P&L by channel.
Common misconception
'All sales are equal.' A $100 sale on Amazon isn't equal to a $100 sale on your own store. Amazon: 15% referral + 12% FBA = 27% of the sale. Your own store: just 3% payment processing. A per-channel P&L is essential.
How to fix it
Low margin due to fees? (1) Calculate a break-even price per channel's commission structure, (2) raise the marketplace price to offset commission (customers don't always know your store's price), (3) consider DTC as your primary channel and marketplaces as supplementary.
Example
A cosmetics manufacturer sold through a major retailer at a 40% commission. Margin after commission: 8%. The same product DTC: 52% margin. They positioned the retailer channel as brand awareness and DTC as the profit engine.
Priority
Calculate margin net of fees for every marketplace each quarter. If margin falls below 15% after all fees, consider raising prices, negotiating a lower commission, or exiting the channel.
Related terms
Keep learning. Metrics that touch the same area:
- Gross MarginFinance(Sale price - COGS) / sale price × 100. The basis for every pricing and advertising decision.
- Amazon MarketplaceMarketplacesThe world's largest commerce platform — 300M active customers. Offers Seller Central (selling directly to consumers) and Vendor Central (selling to Amazon). Fees: 8-15% referral plus FBA fees.
- Buy Box (Amazon)MarketplacesThe box on Amazon that displays 'Add to Cart.' The seller who wins the Buy Box gets 80-82% of sales on that ASIN. Other sellers appear under 'Other Sellers' — with almost no clicks.
- Etsy MarketplaceMarketplacesA marketplace for handmade, vintage, and unique design items. 95M active customers. Fees: $0.20 listing + 6.5% transaction + 3% payment processing. Suited to artistic and unique products.
Jimmy tracks your Marketplace Commission, automatically
WhatsApp alerts when something important changes. No dashboards, no hassle.