Faire, marketplaces & platforms
A brand selling on a wholesale marketplace pays a commission on orders the platform generates, typically at a higher rate on a retailer's first order than on their reorders, with a reduced or waived rate on orders from retailers the brand brought in itself. On top of that sit freight, promotional discounts you opt into, samples, and the cost of the time the channel takes.
The headline commission is the number everyone argues about and rarely the number that decides whether the channel works. What decides it is your reorder rate, because a first-order rate applied once is a customer acquisition cost, while the same rate applied forever is a tax.
The fee lines a brand actually pays
Commission on platform-sourced orders. The main one. Deducted before payout. Two tiers in most models: an introduction rate on a shop's first order, and a lower ongoing rate on everything after.
A reduced or waived rate on your own customers. Most platforms let you route retailers you found yourself through their checkout at a much lower cost, because they did not earn the introduction. This is worth understanding properly — it lets you use the platform purely for its payment and terms machinery on accounts you own.
Freight. Whether you pay it, the retailer pays it, or the platform subsidises it depends on the arrangement and on order size thresholds. Either way it comes out of somebody's margin, and on a two-hundred-dollar order it is not a rounding error.
Promotional discounts. Opt-in events where retailers get a percentage off or free freight. The discount comes out of your price, not the platform's commission.
Samples. Programmes that let a buyer request a sample before committing. Cheap per unit, easy to over-serve.
Your time. Catalogue maintenance, messaging, dispatch, stock updates. Not billed, but real.
The equivalent breakdown for the category generally, including the lines that vary by platform, is in wholesale marketplace fees.
Working it on a real case
Take a candle that retails at twenty-four dollars, wholesales at twelve, and costs four dollars landed. Cases of six.
A new shop orders three cases. Order value two hundred and sixteen dollars. Cost of goods seventy-two dollars. If the introduction commission is a quarter of the order, that is fifty-four dollars. One carton of eighteen candles shipped domestically, say twelve dollars of freight on your side. You net seventy-eight dollars of contribution.
Compare that to the same eighteen candles sold on your own site at twenty-four dollars: four hundred and thirty-two dollars of revenue, seventy-two of cost of goods, but eighteen separate orders to acquire, pack, ship and support. At an eight-dollar acquisition cost and roughly three dollars of packing and postage per order, you are at about a hundred and sixty dollars of contribution for eighteen times the handling.
Per unit, direct wins. Per hour, the case wins. And on the shop's second order, at a lower reorder rate, the case wins by more. That is the actual shape of the trade, and it is the same shape described in wholesale vs retail price.
The first-order rate is an acquisition cost
Brands tend to file the introduction commission under "fees" when it belongs under "marketing".
You did not have that shop. The platform had it, spent money getting it, and handed it to you with the credit risk attached. Fifty-four dollars to acquire a wholesale account that might order four times a year for three years is cheap by any standard a DTC brand would recognise — it is roughly what many brands pay to acquire six or seven direct customers who buy once.
The test is not whether the rate is high. It is whether the account comes back. A platform producing one-time orders at that rate is expensive. A platform producing accounts with three reorders a year is the cheapest channel you have.
So measure it that way. After a season, count the shops that ordered, count how many ordered twice, and divide the total commission by the number of accounts that are still active. That number is your cost per stockist, and it is comparable to anything else you might spend on.
The discount you fund without noticing
Promotional events are the fee line that does the most damage because it does not look like a fee.
A platform runs a buying-season event where participating brands give retailers a discount. Your twelve-dollar wholesale unit becomes ten-something for the duration. On three cases that is more than twenty dollars out of an order that was already carrying commission and freight. Join four events a year and your effective wholesale price is no longer twelve dollars, it is whatever the average comes to — and once retailers learn there is always an event coming, they wait for it.
The discipline is simple and unpopular. Join the one or two events that coincide with the real buying season in your category, and decline the rest. Never discount a product you cannot make more of. And never run a promotion on the marketplace that undercuts the price your direct accounts are paying, because those accounts will find out.
Building the fees into your wholesale price
The wrong move is to raise your wholesale price to cover the commission, because your wholesale price has to work everywhere — on your own B2B store, with direct accounts, and on other platforms — and retailers compare.
The right move is to set the wholesale price from the arithmetic that has to hold regardless: cost of goods at or under a third of retail, wholesale at about half of retail. Then treat the commission as a cost of one channel, and decide channel by channel whether the remaining margin is worth having.
If the answer is that a platform order leaves you almost nothing, the problem is not the platform. It is that your cost of goods is too high for wholesale at all, and no channel will fix that. The readiness version of this check is in the wholesale readiness checklist.
When the fee stops being worth paying
At the point where the platform has stopped doing the job you are paying for.
An account that found you on the platform two years ago, orders every quarter without prompting, and emails you directly with questions is not being introduced any more. Paying a commission on that order buys you checkout and terms, which is worth something, but usually less than the rate.
That is the moment to move the relationship — subject to whatever introduction period your agreement specifies, which you should read rather than guess at. Where it lands is your own B2B store with net terms and saved payment details, so the switch is easier for the buyer, not harder. The comparison of the two homes for an account is in wholesale marketplace vs own website.
And before you get there, you need accounts to move. If you are still looking for the first ones, paste your store or product link into WholesalePilot and look at the preview of retailers and distributors stocking comparable products, so the outreach you do alongside the platform is aimed at shops that plausibly buy your category.
Questions brands ask about marketplace fees
Is the commission negotiable? Not at the rate card level for a small brand. What is adjustable is which orders carry which rate, and that is mostly about routing your own retailers correctly.
Does the commission apply to shipping too? It depends on the platform and changes over time. Check how your payouts are calculated in your own account rather than assuming.
Can I add a surcharge to cover the fee? No. A marketplace price that is higher than your direct price is both a policy breach on most platforms and an obvious signal to any retailer who checks.
What is a healthy net after fees? If a case order leaves you less than about a third of its value after cost of goods, commission and freight, the pricing needs work before the channel does.