Having a hard time monetizing your marketplace platform?
We’re almost ready to release MultiMerch 8.23 that supports four different fee types:
- selling fees
- signup fees
- product listing or insertion fees
- vendor subscriptions
In this post, I’ll tell you exactly how you can use different MultiMerch fees and generate revenues from your marketplace platform.
Sign up fees are one time fees collected by your marketplace from sellers signing up to sell products in your marketplace. MultiMerch currently supports two ways of collecting sign up fees – via direct payments and from seller balances.
Product listing (or insertion) fees are collected from sellers as they start listing their products. Just like with sign up fees, listing fees can be collected via direct payments or from seller’s balance.
Selling (or sale) fees are collected by the marketplace at the time of sale and are calculated for each product sold. These can be paid out to vendors either manually or automatically at checkout if you use Stripe or PayPal Adaptive.
Subscription fees can be charged on a recurring basis via Stripe Subscriptions. You can specify different subscription fees for different vendor plans.
Now, here’s a little more about each of these fees and how you can use them with MultiMerch:
Marketplace platform selling fees
Selling fees are really straight forward. A selling fee is charged by the platform when a vendor’s product is sold.
You can specify a selling fee in 4 different ways:
- for vendor groups (plans), e.g. Standard vs Premium
- for individual vendors, e.g. a lower selling fee for John Doe
- for categories, e.g. 5% on all Electronics sales
- for individual products, e.g. $50 for every iPhone Xr sold
This lets you create a flexible fee structure to make your marketplace platform more attractive to merchants.
Note: Starting with 8.23, vendor-level selling fees are collected once per order. Specifying a $10 vendor selling fee will produce a single $10 fee charge when the vendor receives a new order (no matter how many individual products have been sold).
Specifying selling fees for vendor groups (or plans)
By default, you’ll have one Default vendor group in your marketplace.
The easiest way to start collecting selling fees is to enable them for the Default group via Seller groups > Edit:
Doing so will automatically apply it to all vendors in your marketplace (since all new vendors are part of the default group).
This way, you can create as many different vendor plans as you want and charge different selling fees based on your own business model.
Rewarding sellers with individual selling fees
Let’s say one of your vendors, John Doe, is really good at selling. Or maybe he’s just a good friend of yours.
In any case, you can reward John Doe by applying a personalized selling fee rate via Sellers > Edit:
This will apply a custom selling fee just for this individual merchant without affecting anyone else.
You can use this to reward hand-picked vendors with lower selling fees (or punish an annoying store owner with a higher fee?) without creating a separate plan.
Using category-based selling fees
Another way you can define selling fees is to apply them to whole categories, e.g.:
- 5% on Electronics
- 10% on Clothing
- 30% + $10 on Jewelry
This is especially useful if you’re running an “everything store” like Amazon with lots of different product types.
Specifying a category fee will charge vendors a fee for each product unit sold as part of this category or subcategories.
Need a more flexible configuration? You can also define a different rate for subcategories, e.g.:
- 5% on Electronics
- 15% on Electronics > Cellphones
- 20% on Electronics > Cellphones > Apple
(Although we recommend keeping the fee structure as simple as possible, at least at first).
Specifying individual selling fees for products
Still not flexible enough? Well, you can also use individual selling fee rates for individual products.
For example, here’s how you charge a flat $50 fee just for iPhone Xr sales:
Probably don’t use it for regular products, though. A good use case for individual product fees would be one of a kind or high-margin products like high end jewelry or real estate.
P.S. Starting with v8.23 if both vendor and product/category selling fees are specified, the resulting amount will be the sum of vendor and product fees.
Product listing or insertion fees
I know, selling fees can get complex. They also may not work with your payment flow or payment gateway.
A simpler alternative to selling fees are product listing (or insertion) fees. Listing fees are collected once – when your vendors list products for sale.
Insertion fees can be flat or depend on product’s price and are collected in one of the two ways:
- via an invoice paid by the vendor manually
- by automatically deducting the fee from vendor’s balance
If a listing fee is enabled, your sellers will see a notification when listing a product:
Product insertion fees can be specified on three different levels – for seller groups, individual sellers and marketplace categories.
Specifying listing fees for vendors and vendor groups
Here, listing fees are similar to selling fees – you can specify a listing fee the whole vendor group/plan, like the Default one:
This will apply a listing fee of $5 + 5% from product’s price and deduct it from vendor’s balance for all vendors in the default group.
Similarly, if you want to reward John Doe with a lower insertion fee, you can override the group fee when editing John Doe’s vendor account:
Again, I recommend keeping the fee structure as simple as possible at first. You can always make it more complex later.
Using category-based product listing fees
Just like with the selling fees, you can specify different listing fees for the whole product categories, e.g. Electronics:
Applying an insertion fee to a parent category will automatically apply the same fee to all products listed in the child categories.
Starting with MultiMerch 8.23, if both vendor and category insertion fees are specified, the resulting amount will be the sum of vendor and category fees.
Seller signup or registration fees
Want to make your platform even simpler?
Signup fees are a great way to simplify the fee structure – these are charged only once during registration.
As usual, MultiMerch lets you specify different signup fees for different seller groups (or plans):
Just like insertion fees, signup fees can be paid either via invoices or by deducting the amount from vendor’s balance.
Once the invoice is paid by the seller, their account will be activated automatically.
Vendor plans and subscription fees
For recurring revenues, MultiMerch also supports vendor subscriptions.
At the moment, vendor subscriptions can only be charged via Stripe:
With Stripe, you can create mixed seller plans and tiers and charge either flat subscription fees or per-product (per-seat) fees.
For an in-depth guide on setting up Stripe vendor subscriptions with MultiMerch, see Create recurring vendor plans with Stripe Subscriptions.
We’re releasing MultiMerch 8.23 within a week from today. Now, you can also subscribe to our product updates via our Changelog.