Selling a product for $30 does not mean you receive $30.
If you sell through an online marketplace, part of every sale may go towards commission, transaction fees, payment fees, affiliate commissions, advertising and other selling costs.
Individually, these fees may look small. But when several apply to the same order, they can have a meaningful effect on how much profit you actually keep.
Understanding how marketplace fees affect your profit can help you price products more accurately and avoid confusing sales revenue with actual profit.
What are marketplace fees?
Marketplace fees are charges associated with selling through an online platform.
The exact fees depend on the marketplace, country, product category, seller programme and services you use.
They may include:
- Marketplace commission
- Transaction or payment fees
- Programme or service fees
- Affiliate commissions
- Seller-funded vouchers or discounts
- Advertising costs
- Other platform-specific charges
Not every seller pays every type of fee.
For example, one seller may only pay commission and transaction fees, while another may also participate in an affiliate programme, run advertisements and fund promotional vouchers.
This is why looking at a single headline commission rate may not give you the full picture.
Revenue is not the same as profit
Suppose you sell a product for $30.
That $30 is your sales revenue.
Now imagine the order has:
Product cost: $10
Packaging: $1
Marketplace commission: 10%
Transaction fee: 3%
The percentage-based marketplace fees would be:
$30 × 13% = $3.90
Your total costs would therefore be:
$10 + $1 + $3.90 = $14.90
And your estimated profit would be:
$30 − $14.90 = $15.10
Your profit margin would be approximately:
$15.10 ÷ $30 × 100 = 50.3%
So although the customer paid $30, the amount left as profit in this simplified example is $15.10.
How to calculate profit after marketplace fees
A simple way to estimate your profit is:
Profit = Selling Price − Total Costs
But your total costs should include more than the product itself.
For an ecommerce seller, this might mean:
Total Costs = Product Cost + Packaging + Shipping + Marketplace Fees + Payment Fees + Advertising + Affiliate Costs + Other Selling Costs
If some fees are calculated as percentages of the selling price, calculate those first.
For example:
Selling price: $50
Product and fulfilment costs: $20
Marketplace commission: 8%
Transaction fee: 3%
Total percentage-based fees are:
8% + 3% = 11%
So:
$50 × 11% = $5.50 in marketplace fees
Estimated profit:
$50 − $20 − $5.50 = $24.50
Estimated profit margin:
$24.50 ÷ $50 × 100 = 49%
This is a simplified example, but it shows why calculating profit after marketplace fees gives you a more useful picture than looking at revenue alone.
Why percentage-based fees can be easy to underestimate
Percentage-based fees behave differently from fixed costs.
If your packaging costs $1 per order, that cost remains $1 whether you sell the product for $20 or $30.
But a 10% marketplace commission changes with your selling price.
At a $20 selling price:
10% commission = $2
At a $30 selling price:
10% commission = $3
At a $50 selling price:
10% commission = $5
This matters when setting prices because percentage-based fees grow along with your selling price.
Simply adding a desired profit percentage on top of your costs may therefore produce a different margin from the one you intended.
If you want to work backwards from a target margin while accounting for percentage-based fees, Seller Ledger's Selling Price Calculator can estimate the required selling price.
Small fees can add up
A marketplace may have several different charges associated with a single sale.
Imagine a $40 order with:
Marketplace commission: 9%
Transaction fee: 3%
Affiliate commission: 5%
Together, those percentage-based charges equal:
17%
On a $40 sale:
$40 × 17% = $6.80
And this is before considering your product cost, packaging, shipping, advertising or other expenses.
This doesn't mean using these services is necessarily unprofitable. Some may help generate sales that you would not otherwise receive.
The important thing is to include their cost when calculating what you actually keep.
Don't forget advertising costs
Advertising is sometimes treated separately from marketplace fees, but it still affects the economics of each sale.
Suppose you spend $100 on advertising and receive 20 orders attributable to that spend.
Your average advertising cost per order would be:
$100 ÷ 20 = $5
If the product generates $12 of profit before advertising, your estimated profit after allocating that advertising cost becomes:
$12 − $5 = $7
Looking only at marketplace fees while ignoring advertising could therefore overstate the profit you make from each order.
What about seller-funded discounts and vouchers?
Discounts can affect profit differently depending on how a marketplace structures the promotion.
If you fund a $5 voucher yourself, that $5 ultimately affects the amount you keep from the order.
There may also be cases where marketplace fees continue to be calculated according to rules that differ from the way you expect the discount to work.
Because marketplace programmes and fee structures vary, check the rules and rates that apply to your seller account rather than assuming every discount is treated the same way.
Before running a promotion, you can use Seller Ledger's Discount Profit Calculator to compare your regular profit with your estimated profit after a discount.
Marketplace fees can affect your pricing decisions
Once you understand your total selling costs, you can evaluate your price more clearly.
For example, two sales channels could produce the same $30 revenue but very different profits.
Channel A
Selling price: $30
Total costs and fees: $15
Profit: $15
Channel B
Selling price: $30
Total costs and fees: $20
Profit: $10
Both channels generated a $30 sale.
But the amount you actually kept was different.
This is one reason sellers may need to consider their costs on each sales channel rather than assuming one price produces the same margin everywhere.
TikTok Shop and Shopee fees
Marketplace fee structures can vary considerably between platforms.
For example, a TikTok Shop seller may need to consider platform commission, transaction fees, affiliate commission, advertising and seller-funded vouchers.
A Shopee seller may encounter commission, transaction fees, programme or service fees, advertising, affiliate costs and seller-funded promotions.
The applicable rates can also differ between sellers, categories, programmes and markets.
Rather than relying on a generic percentage, check the current rates shown in your own Seller Centre and enter those figures into your calculation.
Seller Ledger has dedicated calculators for estimating these costs:
TikTok Shop Profit Calculator — estimate what you keep after platform fees and other selling costs.
Shopee Profit Calculator Singapore — estimate Shopee Singapore profit after commission, transaction fees, programme fees and other costs.
How to calculate your real profit margin
Once you have estimated your total profit, your profit margin can be calculated as:
Profit Margin (%) = Profit ÷ Selling Price × 100
For example:
Selling price: $35
Total costs and fees: $22
Profit: $13
Your estimated profit margin is:
$13 ÷ $35 × 100 = 37.1%
The important part is deciding which costs belong in your calculation.
Leaving out marketplace fees, advertising or fulfilment costs can make the resulting margin look higher than the amount you actually retain from the sale.
Which marketplace costs should you track?
You don't necessarily need a complicated accounting system just to understand the economics of one product.
At a basic level, it can help to know:
- Your selling price
- Product or material cost
- Packaging cost
- Seller-paid shipping
- Marketplace commission
- Transaction or payment fees
- Programme fees
- Affiliate commission
- Advertising cost per order
- Seller-funded discounts
- Other per-order costs
Some of these costs are fixed amounts while others are percentages.
Keeping them separate makes it easier to understand what changes when your price, advertising spend or marketplace rates change.
The takeaway
Marketplace revenue is only the starting point.
To understand what you actually make from a sale, account for the costs that sit between the customer's payment and your eventual profit.
Remember:
- Marketplace commission is only one possible selling cost.
- Transaction fees, advertising, affiliate commissions and promotions can also affect profit.
- Percentage-based fees increase as the selling price increases.
- The same selling price can produce different profit margins on different sales channels.
- Marketplace fee rates can vary by seller, category, programme and country.
- Your own Seller Centre is the appropriate place to confirm the rates that apply to your account.
Once you know those figures, you can use Seller Ledger's calculators to compare different prices, fees and selling scenarios before making a decision.