Agreements Overview

The specifics of the commission outlined in a seller agreement dictate how payouts are calculated and what portion of the revenue is retained by the marketplace.

The commission structure on an agreement defines what the marketplace earns from each sale. The commission is deducted from a vendor's payout. Commissions can be percentage based, flat-rate fees, or a combination of both.

You can adjust the commission and fee structure at any time. However, for accounting purposes, previously calculated commissions will maintain their original rates. See changing a seller's agreement for more information.

Commission types

You select the commission type when you create an agreement. There are two commission types:

• Marketplace commission: Take a percentage of product sales or charge order fees to the seller.
• Markup commission: A mark up is added to product prices to calculate the purchase price paid by the buyer.

Markup vs. marketplace commissions

With marketplace commissions, the marketplace takes a percentage or flat-rate fees off the sale price as a commission. This means the seller receives less than their original price.

With markup commissions, the marketplace adds a markup to the seller's price. The seller gets their full asking price, and the marketplace earns the additional markup. Sellers are not affected by the commission rate with this type, as the buyer pays for the commission in their purchase price.

The following diagram illustrates the difference between marketplace and markup commissions, where both agreements leverage a 20% commission rate: