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Why is commission important?
Why setting a commission is important in your marketplace.
Table of Contents
The marketplace commission is the easiest way to monetize your Sharetribe marketplace. It allows you to charge a fee for every money transaction that happens in your marketplace. A good commission can be fundamental to keep your marketplace healthy and attract new users. Most marketplace platforms monetize by charging commissions from the providers in a transaction that happens in the marketplace.
Ideally, the commission should cover the costs of running your marketplace, which, for example, includes Stripe’s processing fees and, eventually, even account for part of your marketplace profit. This means that to monetize from commissions, it’s essential to facilitate transactions on the marketplace.
Provider commission
The provider commission is a fixed or percentage fee that’s taken from the listing price. It’s paid by the seller, and it goes to the marketplace.
Example
Let’s set the provider commission as 10%. If the listing price is $60, then the seller commission of 10% is used. This means that the buyer pays a total of $60. The marketplace gets $6, and the seller gets $56.
Why is it called Provider commission?
There are other types of commission that you could charge in your marketplace. At the moment, only charging the Provider is supported. You cannot have any other type of commission.