Faire, marketplaces & platforms
Commission is one of six places money leaves a wholesale marketplace order. The others are freight, promotional discounts you opt into, sample programmes, returns and cancellations, and the currency and payment costs that sit quietly underneath. A brand comparing two platforms on their headline rate alone is comparing one sixth of the cost.
None of this means marketplaces are expensive. It means the number you should be managing is what you keep per order after everything, and then what you keep per account that comes back — which is a different figure, and a far more useful one.
What you are actually buying
Two things, and it is worth naming them because they justify very different prices.
The first is an introduction. A retailer who had never heard of you placed an order. Whatever that costs is a customer acquisition cost, and for a wholesale account that may reorder for years, it is usually cheap.
The second is the transaction machinery: checkout, invoicing, payment terms extended to the retailer, credit risk carried by someone other than you, shipping labels at negotiated rates. That machinery has a fair price too, and it is much lower than the price of an introduction, which is why nearly every platform charges a lower rate on reorders and a lower one still on retailers you bring yourself.
Once you separate those two, the whole fee conversation gets simpler. The question becomes whether you are still paying introduction prices for what is now just a transaction.
The six places money leaves the order
Commission. Deducted before payout, tiered between a retailer's first order and their reorders. This is the line everyone knows.
Freight. Either you pay it, the retailer pays it, or the platform subsidises it above some order value. On a two-hundred-dollar order, a single carton at twelve dollars is a real share of the margin, and a bulky low-value product can be uneconomic on this channel entirely.
Promotional discounts. Buying-season events where participating brands give retailers money off or free delivery. The discount comes from your price, not the platform's cut, and it is the fee line that does the most damage because it does not look like one.
Samples. Programmes that let a buyer try before committing. Cheap per unit, and easy to give away a case a month without noticing.
Returns and cancellations. A damaged carton, a mis-picked order, a retailer who cancels before dispatch. Each costs you the goods, the freight both ways, or both.
Payment and currency. Cross-border payouts carry conversion costs, and platforms hold funds on a cycle. Neither is large per order; both are permanent.
The fees that never appear on a fee page
Three, and they are the ones that make a channel quietly unprofitable.
Stock held for the channel. If you keep units reserved so a marketplace listing never goes out of stock, that is cash sitting still. It is not billed and it is real, particularly for a brand with several variants.
Your time. Catalogue maintenance, stock syncing, buyer messages, dispatch, chasing a courier. A few hours a week at your own rate is a bigger line than most of the fees above.
Discount conditioning. Once retailers learn a platform runs discount events regularly, a portion of them stop ordering between events. That is not a fee on any order, it is a permanent reduction in what your list price achieves. The way to manage it is to join one or two events a season that line up with your real buying window, and decline the rest.
Comparing two platforms like for like
Build the same small model for each and stop arguing about headline rates.
Take one typical first order — for most small brands, three cases at your standard case price. Write down the order value, the cost of goods, the commission at the introduction rate, the freight you would carry, and any promotion you would realistically join. What is left is contribution per first order.
Then do it again at the reorder rate with no promotion, because that is what the second year looks like.
Worked once: a twelve-dollar wholesale unit, cases of six, three cases is two hundred and sixteen dollars. Cost of goods at four dollars a unit is seventy-two. A quarter taken on the first order is fifty-four. Freight twelve. Contribution seventy-eight dollars. At a reorder rate of half that commission, the same order leaves you a hundred and five. Two platforms with identical headline rates can still differ here if one subsidises freight above a threshold your average order clears and the other does not.
The platform-specific version of this arithmetic is in Faire fees for brands.
Cost per stockist, not cost per order
Here is the number that should drive the decision.
At the end of a buying season, take everything the platform charged you across all orders. Divide it by the number of accounts that are still active — shops that ordered at least twice, or ordered recently enough to count as live.
That is your cost per stockist. A platform that charged you six hundred dollars in commission across a season and left you with eight repeating accounts cost seventy-five dollars per stockist. For a wholesale account that may order three times a year for several years, that is one of the cheapest acquisition costs available to a small brand, and it compares directly against what you would spend on trade show space, a sales rep's commission, or your own hours doing outreach.
A platform that charged the same six hundred dollars and produced twenty one-time orders cost you thirty dollars per order and nothing per stockist, which is an entirely different verdict from the same fee structure. The fee was never the variable. Retention was.
Red flags in a fee structure
No difference between first-order and reorder rates. You are paying introduction prices forever on accounts the platform introduced once.
A long or vague exclusivity window on introduced retailers. Read this clause properly. It determines when, if ever, an account can move onto your own system.
Mandatory participation in promotions. Opt-out should be genuine and without a ranking penalty you can feel.
Unclear responsibility for unpaid retailer invoices. If the platform extends terms to shops but does not carry the default, you are funding the credit without the collections leverage.
A subscription that only pays back above a volume you have never reached. Model it at your current order rate, not at the rate the pricing page assumes.
What to do when the maths does not work
If a case order leaves you less than about a third of its value after cost of goods, commission and freight, the problem is usually not the platform.
Most often the cost of goods is too high for wholesale at all. Wholesale needs cost of goods at or under a third of retail, because wholesale is roughly half of retail and a workable margin has to survive underneath. The arithmetic is in wholesale vs retail price, and the harder question of whether the channel suits your product is in is wholesale profitable for small brands.
Sometimes the fix is packaging: a lighter carton, a smaller case, a product that ships flat. Freight is the line a brand can actually engineer.
And sometimes the fix is channel mix — keep the marketplace for discovery, move repeat accounts onto your own B2B store where the only cost is a payment fee. That comparison is in wholesale marketplace vs own website.
If you are trying to work out whether enough stockists exist in your category to justify any of this, paste your store or product link into WholesalePilot and look at the preview of retailers and distributors stocking comparable products before you build a listing.
Questions brands ask about marketplace costs
Is the commission charged on shipping as well as goods? It varies by platform and changes. Check how your own payouts are calculated rather than assuming either way.
Can I raise my marketplace price to cover the fee? No. Inconsistent wholesale pricing is a policy problem on most platforms and an obvious one to any retailer who checks two sources.
Are subscription tiers worth it? Only above a monthly order volume you can already demonstrate. Model it on last season's numbers, not on next season's hopes.
What is a reasonable total cost for the channel? If the platform's total take across a season works out cheaper per retained stockist than your own outreach time would, it is doing its job.