High-end vintage furniture? Who doesn't want it!
Chairish specializes in high-end vintage. The platform's gained a reputation for its unique items (think random things that your grandparents collect).
Items that appeal to a specific audience looking for one-of-a-kind pieces (like one of my relatives, who had a six-foot-high eagle in his entrance, ah what?)
But Chairish ensures that they also make money. Chairish charges a commission fee of 22% on vintage or used products.
But Chairish ensures that they also make money. Chairish charges a commission fee of 22% on vintage or used products.
Some might think that's high. Still, Chairish's commission allows them to:
- Corner a market willing to pay top dollar.
- Invest in marketing and advertising to attract buyers to the platform
- Provide a high level of customer service
Chairish also offers a range of services to help sellers showcase their products, including:
- Pretty professional photography
- Styling
- Curation
So back to the question, how much commission to charge? Today, we'll tackle commission rates on:
- Product marketplaces
- Service marketplaces
- Travel and delivery marketplaces
Why do we want to know these commission rates?
- For Competitive Reasons: We want to win (I mean, you really want to succeed in the marketplace)! Knowing the commission rates of other marketplaces helps you be competitive.
- For Customer Satisfaction Reasons: Marketing with the right commission rates, you'll be in a better place to serve your customers and have them return to you.
- For Return on Investment Reasons: Knowing an expected commission rate for your online marketplace can help you plan your business. You know, calculating your return on investment and all that!
Depop, like Chairish, is a popular marketplace for buying and selling secondhand. In this case, clothing and accessories. Specifically, items that take the fashion industry by storm!
Its mobile platform is a hit among Gen Z and Millennial shoppers. The generation who wants trendy clothing yet wants it at an affordable price.
Its mobile platform is a hit among Gen Z and Millennial shoppers. The generation who wants trendy clothing yet wants it at an affordable price.
While not 22% like Chairish (gulp), Depop charges a commission fee of 10% on each sale. Sellers earn a decent profit.
In addition to the commission fee, Depop also charges a transaction fee of 3.3% + $0.45 on each sale. Much of which covers the cost of processing payments.
This commission fee structure has proven successful for Depop. It allows them to gain a large loyal user base while generating revenue to support its operations.
This commission fee structure has proven successful for Depop. It allows them to gain a large loyal user base while generating revenue to support its operations.
Create Your Own Marketplace Fast
Get Your Fees Right to Ensure Your Product Marketplaces Success
Product marketplaces typically charge around 5% to 25% commission. The commission percentage depends on a variety of factors, such as the following:
- Product category
- Level of competition
- Value of the product itself
- Sellers' gross margins
Here are some examples of product commission rates:
| Marketplace | Commission Rates | Notes |
| Etsy | 6.5% | Called Final Value Fee |
| eBay | 0.5% - 15% | Called Final Value Fee; charged as Final value fee % + $0.30 per order; Final percentage can still differ depending on the category and total amount spent |
| Shopee Singapore | 2.16% | Commission fees are charged for non-mall sellers who have been registered for more than 90 days on the platform; Users registered for less than 90 days are not charged a commission |
| Poshmark | $2.95 flat fee or 20% | A commission fee of $2.95 is charged for sales under $15. For $15 or more, sellers are charged a 20% commission |
| Swappa | 3% | Both sellers and buyers pay a commission fee |
| Newegg | 8% - 12% | The commission rate depends on the category |
| Aliexpress | 5% and 8% | Commission fee depends on the product category |
| Faire | 15% - 25% | The standard is 15%; 25% only applies to the first order of a new customer |
| Tradesy | $7.50 flat fee or 20% | A flat commission of $7.50 for all sales under $50. For over $50, the commission is 20% |
The product marketplace Reverb lives off commissions!
Reverb is an online marketplace that caters to musicians. Musicians flock to the Reverb platform to buy and sell new and used gear.
Reverb is an online marketplace that caters to musicians. Musicians flock to the Reverb platform to buy and sell new and used gear.
The commission fee charged by Reverb is reasonable. Competitive compared to other marketplaces in the industry. There are a few things that contribute to Reverb's success:
- The platform's commission rate is 5% (relatively low)
- Sellers benefit from an active online community of musicians
- Low commission rates encourage sellers to list high-value items (more variety)
How would you start creating a commission structure in your product marketplace?
- Establish a clear and transparent commission structure
- Offer additional value to sellers (create a community online, e.g.)
- Continuously adjust commission rates as needed
Get to Learn Service Marketplace Commission Rates ("Take Rates")
Like product-centered platforms, service or freelance marketplaces charge a 5% to 20% commission (usually on the higher end).
For service or freelance marketplaces, such as Upwork and Fiverr, it's often called a "take rate."
For service or freelance marketplaces, such as Upwork and Fiverr, it's often called a "take rate."
Service marketplaces fees cover various expenses for service platform things:
- Platform enhancements
- Job postings
- Payment processing fees
- Dispute resolutions (yes, disputes are taken into account)
Some examples of freelance or service marketplaces commission rates:
| Marketplace | Commission Rate | Notes |
| Upwork | 5% - 20% | Implements a fee structure; the more a freelancer earns, the lower the commission rate |
| Fiverr | 20% | Fiverr calls these Transaction Fees; |
| Airtasker | 10% to 20% | They are called Service Fees in the platform. Like Upwork, the higher the freelancer's tier is, the lower the service fee. |
| TaskRabbit | 15% | Paid by clients after the task has been completed |
| Wonolo | 45% | The service fee charged after the job has been approved by the client; |
Guru seems to have their service commission rates dialed in.
Guru is an online marketplace catering to businesses looking for top talent. With a network of independent professionals, companies can find skilled freelancers in fields such as:
- Web design
- Software development
- Writing
- And more (primarily IT related)
Guru charges an 8.95% seller commission rate and a 2.9% handling fee on every invoice. Fairly reasonable compared to other freelance marketplaces. Additionally, Guru offers lower fees for high-volume sellers.
Using Guru's example, dividing your commission take rates between buyers and sellers is possible. It can be helpful to consider this option when structuring commission rates.
Using Guru's example, dividing your commission take rates between buyers and sellers is possible. It can be helpful to consider this option when structuring commission rates.
Besides commissions, how can you streamline your service marketplace payment process?
- Streamlining the payment process for freelancers and clients
- Making it easy for parties to track invoices, payments, and project progress
- Offering a range of pricing plans, including volume-based discounts
- Providing a user-friendly platform allows for seamless communication
- Implementing a robust rating system to ensure high-quality standards
Discover the "Secret" Travel and Delivery Marketplace Commissions
Are they a secret? No, not really, but they can be hefty. Travel and delivery platforms' commission rates range from 15% to 25%.
Ah, what? 25%? Yes, they do!
Travel and delivery platforms, such as Airbnb and Uber Eats, provide convenient services to consumers but charge commission fees to their hosts and drivers, respectively.
Travel and delivery platforms, such as Airbnb and Uber Eats, provide convenient services to consumers but charge commission fees to their hosts and drivers, respectively.
These fees do affect the profitability of hosts and drivers. Sellers need to factor in these costs when setting their prices or rates.
Some examples of travel and delivery marketplace commission fees:
| Marketplace | Commission Rate | Notes |
| DoorDash | 6% - 30% | Three tiers for commission fees at 15%, 25%, or 30%; 6% commission on Pickup orders |
| Postmates | 15% - 30% | Charges restaurants a commission fee on all orders placed |
| Grab Singapore | 20.18% | Applicable to Grab Car |
| LYFT | ~ 20% - 25% | The platform takes a commission of the gross fare, and the rest goes to the driver |
| Klook | 15% – 25% | Commission fees charged to a Klook partner |
Uber Eats, one of the more well-known delivery services, charges a 6% to 30% commission rate on orders.
Uber Eats benefits from the brand recognition and customer base of its parent company, Uber, which helps to drive traffic and increase sales on the platform.
The brand recognition gives Uber a bit of a "moat" around its commission structure.
The brand recognition gives Uber a bit of a "moat" around its commission structure.
Interested in establishing delivery marketplace commission rates?
- Ensure clear communication about commission rates (providers, customers)
- Provide value-added services to customers (insurance, premium delivery etc.)
- Continuously monitor and optimize your commission rates
Closing Summary
Understanding the commission rates of different marketplaces is vital for online marketplace operators.
Product-centered platforms, service or freelance marketplaces, and travel and delivery platforms have different commission rates ranging from 5% to 25%.
- What do you think of the take rates of these online marketplaces?
- Do you mind paying these commission rates as a buyer?
- What is an online marketplace that you frequently use? How much is their take rate?
- Want to learn more about online marketplaces? Learn about the commission structures around the top online marketplace business models. Or discover three reasons online marketplaces are drastically growing.
Frequently Asked Questions
What are online marketplace commissions (general)?
Online marketplace commissions refer to the fees or percentages an online marketplace platform charges to facilitate transactions between buyers and sellers.
These commissions are typically deducted from the total transaction amount and serve as a revenue stream for the platform. The specific commission structure can vary depending on the online marketplace and the type of transaction being conducted.
Here are a few common types of commission structures:
- Percentage-based Commission: Many online marketplaces charge a percentage-based commission on the total transaction value. For example, if the commission rate is 10% and a product sells for $100, the platform will deduct $10 as a commission fee.
- Flat Fee: Some online marketplaces may charge a fixed or flat fee for each transaction, regardless of the transaction value. For instance, if the flat fee is $5, then every transaction on the platform will incur a $5 commission fee.
- Tiered Commission: In certain cases, online marketplaces may implement a tiered commission structure based on different factors such as transaction volume or seller performance. As sellers achieve higher sales volumes or meet specific criteria, they may become eligible for reduced commission rates.
It's important for sellers to carefully review and understand the commission structure of an online marketplace before engaging in transactions. Sellers should consider how the commission fees will impact their profitability and pricing strategies.
Online marketplace commissions typically cover various services provided by the platform, including:
- Transaction facilitation: The platform facilitates secure transactions, ensuring the safe exchange of goods or services between buyers and sellers.
- Payment processing: The platform may handle payment processing, including credit card transactions or other payment methods, ensuring seamless and secure financial transactions.
- Customer support: The platform may provide customer support services to assist both buyers and sellers in resolving any issues, disputes, or inquiries related to the transaction.
- Platform maintenance and development: The commission fees may contribute to maintaining and improving the online marketplace platform, including infrastructure, security measures, and ongoing platform development.
It's essential for both buyers and sellers to factor in the commission fees when pricing products or services on online marketplaces.
Sellers should consider the overall value provided by the platform. Reviewing its user base, visibility, marketing reach, and the convenience of accessing a ready-made customer base. To make sure to determine if the commission fees are justified.
The specific commission rates and structures can vary significantly between online marketplaces.
