How to charge marketplace sellers: fee plus revenue share

Most marketplaces and platforms end up charging sellers in two parts: a flat monthly fee for being on the platform, and a share of what moves through it. The pricing is easy to write on a slide. Billing it every month, so each seller gets an invoice they understand and do not dispute, is where the work is. This guide covers how to set the two numbers, how to get volume onto the invoice, and how to show the math so the questions stop.

One scope note first. There are two different money flows on a marketplace. One is the buyer paying the seller, which is payments and payouts: splitting a charge, holding funds, paying sellers out. The other is you billing the seller for your fee. This guide is about the second.

Why a fee plus a share

Each part does a different job:

• The fixed fee covers the cost of having the seller on the platform at all: support, the listing, the tools. It also filters out sellers who sign up and never sell.
• The share lines your revenue up with the seller's success. When they sell more, you earn more, and a small seller is not priced out on day one.

Charge only a share and your smallest sellers cost you money. Charge only a fee and your largest sellers get a bargain while your smallest ones leave. The pair is the compromise nearly every platform lands on.

Setting the numbers

Start from the seller's point of view: what do they keep? A seller doing $84,000 of volume a month on a plan of $299 plus 2.9% pays:

Line	Amount
Platform fee	$299.00
2.9% of $84,000.00 volume	$2,436.00
Total	$2,735.00

That is an effective rate of about 3.26% of volume. The fixed fee matters less as a seller grows: at $20,000 of volume, the same plan comes to $879, an effective 4.4%. Run this table for a small, a typical and a large seller before you publish anything. If the small seller's effective rate looks punishing, lower the fee, not the share.

Two plans, and the break-even between them

A single plan rarely fits both a new seller and an established one. A common pattern is two plans that trade fee against share:

• Starter: $99 a month plus 3.5% of volume.
• Pro: $299 a month plus 2.9% of volume.

The break-even is where the two cost the same. Pro costs $200 more in fees and saves 0.6% of volume, so it pays off once 0.6% of volume passes $200: about $33,333 a month. Below that, Starter is cheaper; above it, Pro is.

Monthly volume	Starter	Pro
$10,000	$449.00	$589.00
$33,333	$1,265.66	$1,265.66
$84,000	$3,039.00	$2,735.00

Publish the break-even. Sellers who can see it trust the plans more, and the ones above it upgrade on their own. Let sellers move between plans from their own billing page, with the change prorated to the day so a switch mid month is fair in both directions.

Getting volume onto the invoice

The share can only be billed if the volume reaches your billing system. There are two ways to do it:

• Report as it happens. Each sale, or each day's total, is sent to billing as it happens. The month's volume builds up in real time and the invoice is ready at month end with no extra step.
• Report once a month. A job at month end adds up each seller's volume and sends one number. Simpler to build, but a failed job means late invoices for everyone.

Whichever you choose, give every record a unique id, so a record sent twice (a retry after a timeout, a rerun job) is counted once. Double counted volume is the fastest way to lose a seller's trust, because they can check it against their own sales report.

Decide, too, what volume means. Gross sales, or net of refunds? Including tax and shipping, or not? Write it in your seller terms and send the same figure every month. Most disputes about a revenue share are disputes about the base, not the rate.

Showing the math

The invoice should let a seller check your number with a calculator and their own sales report. That means three things on the page:

1. The base fee as its own line.
2. The volume the share was worked out from, with the period it covers.
3. The rate and the result, so "2.9% of $84,000.00 = $2,436.00" is written out, not implied.

When a seller asks why their invoice is $2,735, the answer should already be on the invoice. Every question you prevent this way is time your support team gets back, and a seller who never wonders whether the number is fair.

Minimums, caps and tiers

Three refinements come up once the basic model runs:

• A minimum fee. A seller with a quiet month still pays something. Often the plan fee already does this; a minimum on the share is useful if you drop the fee entirely.
• A cap. Very large sellers may negotiate a ceiling on the share. Give it to them as a separate plan rather than a special case in your code.
• A lower rate at higher volume. 2.9% up to $100,000 and 2.4% above. A tiered rate rewards growth without a separate plan for every size.

Keep the number of plans small. Three plans with clear break-evens are easier to sell and to bill than ten custom ones.

Month end, done

With volume reported as it happens and the math on the invoice, month end is a list: invoices sent, paid, and a few to follow up. The failure mode this replaces is familiar: a spreadsheet of volume per seller, a manual invoice for each one, and a week of replies from sellers questioning the number.

yRecurring bills your sellers your fee: the monthly base and the share of their volume on one subscription, volume counted once as you send it, and the base, the volume and the share on every invoice. It does not pay sellers out or split the buyer's payment; that stays with your payment provider. See how it works in billing for marketplaces and platforms. Our own price is a flat monthly fee, never a percentage of your revenue.