How Revenue is Split with Sellers
A seller's payable balance accrues revenue that a seller earns over time. Revenue from the following sources accrues into the seller's payable balance:
- Sales revenue
- Shipping revenue (if applicable)
Sales revenue
Sales revenue is split between the marketplace operator and the sellers based on the terms agreed upon in their seller agreement, which defines the marketplace's commissions and fees they earn from each order. The marketplace fees and commission are deducted from the seller's payable balance.
For example, consider the scenario where the marketplace has an agreement with a seller to take a commission rate of 10% on the sale price and charge a flat fee of $5 per order.
Suppose a buyer purchases a product for $100 on the marketplace. The following table breaks down the marketplace’s take and the balance payable to the seller:
| Description | Amount |
|---|---|
| Product price | $100 |
| Marketplace commission (10%) | $10 |
| Marketplace fee | $5 |
| Seller payable | $85 |
This split ensures that each party receives its share of the revenue generated from the sale. The revenue accrual mode setting dictates when these amounts are officially recognized as earned and available for payout.
Shipping revenue
Shipping revenue is not split. The entire shipping fee is allocated to the party responsible for shipping. When using the fulfillment revenue accrual mode, shipping revenue accrues when the first line item in a seller order is fulfilled.
The system knows which party is responsible for shipping from the Fulfillment model field in your marketplace configuration settings.