Marketplaces have become an essential sales channel for companies of all sizes. They offer access to a wide audience and make it quick and easy to expand your business. However, marketplaces charge commissions on sales made by sellers. These commissions can have a significant impact on sellers' profitability.
In this article, we'll take a look at market place commissions. We'll look at what a commission is marketplace, what the different types of commission are, how to calculate commission amounts and how to negotiate commissions with marketplace.
Marketplace commissions are an essential part of the marketplace business model. They cover the operating costs of marketplace, such as infrastructure, marketing and customer support costs. In return, as a seller, you benefit from the reputation of marketplace.
Examples of commissions marketplaces
Sales commission is the most common type of commission on marketplaces. It is calculated as a percentage of the selling price of the product or service.
Examples of sales commissions:
- Commission on Amazon sales
Amazon: 15% for most product categories, and 8% for electronics.
Learn more about Amazon commissions
- Commission on Cdiscount sales
Cdiscount: 15% for most product categories.
Find out more about Cdiscount commissions.
|Jewelry (excluding glasses and watches)
|TV, Computers, tablets, PC screens, Printers & scanners, video projectors
|Cell phones / Smartphones
|Video game consoles
|High-Tech & Computer Accessories
- Commission on eBay sales
eBay: 10% for new products, 15% for used products.
Sales commission rates vary according to marketplace, the category of products or services sold, sales volume or the seller's reputation.
Commission on delivery charges
Delivery charge commission is a less common type of commission on marketplaces. It is calculated as a percentage of the delivery charge billed to the customer.
Examples of commissions on delivery charges :
- Commission on Amazon delivery charges
Amazon: 2.99% for orders shipped by Amazon, and 1.99% for orders shipped by the seller.
- Cdiscount shipping commission
Cdiscount: 1.5% for orders shipped by the seller.
- eBay shipping commission
eBay: 1.5% for orders shipped by the seller.
Delivery commission rates vary according to marketplace, the category of products or services sold, and sales volume.
Marketplace commissions on listing fees
The commission on listing fees is a type of commission charged by marketplace when the seller registers on the platform. This commission is generally billed only once, at the time of registration.
Examples of commissions on registration fees :
- Commission on Amazon
listing fees: €39 per month for professional sellers, €0 for private sellers.
- Commission on Cdiscount registration fees
Cdiscount: €29.99 per month for professional sellers, free for private sellers.
- Commission on eBay listing fees
eBay: €0 for private sellers, €29.95 per month for professional sellers.
Commission amounts on listing fees vary according to marketplace and the type of seller.
How to reduce the impact of commissions marketplaces
Increase your sales volume
One way to reduce the impact of commissions marketplace is to increase your sales volume.
That's easy to say, isn't it?
The more you sell, the less commissions represent a significant proportion of your sales.
To increase your sales volume, you can :
- Improve the visibility of your products or services
- Develop your marketing strategy
- Offer promotions and discounts
- Avoid stock-outs
- Optimize your cash flow with one-day payment
By increasing your sales volume, you can reduce the impact of marketplace commissions and improve your profitability.
Optimize your margins
Another way to reduce the impact of commissions marketplace is to optimize your margins. This means increasing your prices or reducing your costs.
Increase your prices
To raise your prices, you need to be sure that your products or services are valued at the right price. You can also try to develop a differentiation strategy to justify your higher prices.
Reduce your costs
To reduce your costs, you can :
- Improve your operational efficiency
- Negotiate lower prices with your suppliers
- Reduce your marketing expenses
By optimizing your margins, you can reduce the impact of marketplace commissions and improve your profitability.
Example: suppose you sell a product for €100 and marketplace charges a 15% commission. If your margin is 20%, you'll earn €70 for each sale. If you manage to increase your margin to 30%, you'll earn €85 for each sale.
In this case, the impact of the marketplace commission is reduced by 10%.
How to negotiate commissions marketplaces
Negotiating marketplaces commissions: child's play?
Negotiating commissions marketplace is possible, but not child's play.
Marketplaces are generally reluctant to negotiate commissions on sales, as they are an important source of revenue. However, it is possible to negotiate commissions on listing fees, subscriptions or delivery charges.
We explain everything!
To negotiate commissions marketplace, it's important to be prepared. You need to know the commission rates charged by other marketplaces, and you need to be able to justify your request. It's also important to remain professional and respectful, even if the negotiation is unsuccessful.
Here are some tips for negotiating commissions marketplace :
- Do your research.
Before negotiating, take the time to compare the commission rates charged by different marketplaces. This will give you an idea of what's possible.
- Be prepared.
Determine how much you're willing to pay in commission. Be prepared to justify your request on the basis of your sales volume, your reputation or the added value you bring to marketplace.
- Be professional.
Even if the negotiation is unsuccessful, it's important to remain professional and respectful.
With the right preparation and a professional attitude, it's possible to negotiate more advantageous marketplace commissions.
Factors to consider
When negotiating commissions marketplace, it is important to consider the following factors:
- Sales volume: the more you sell, the greater your chances of negotiating better commissions.
- Notoriety: if you're a well-known and appreciated salesperson, you're more likely to negotiate better commissions.
- Added value: if you bring added value to marketplace, for example by offering unique products or services, you are more likely to negotiate better commissions.
You also need to be aware of the limits of negotiation. Marketplaces are generally reluctant to negotiate commissions on sales, as these are an important source of revenue. However, it is possible to negotiate commissions on listing fees, subscriptions or delivery charges.
Commissions marketplace are a reality for sellers wishing to sell their products or services on these platforms. It's important to be aware of the different types of commission and the rates charged by different marketplaces, so you can make an informed decision about which platform to sell on.