Marketplace fees: revenue, payout and profit explained

The amount a marketplace transfers to your account is not your profit. Even after platform fees have been deducted, product cost and the tax component of the sale still matter. This guide explains the simplified model used in our calculator.

A worked sale of 1,200

Assume a VAT-inclusive selling price of 1,200, commission of 15%, an illustrative VAT rate of 20%, a service fee of 10, shipping of 60 and product cost excluding VAT of 600. All amounts use the same currency.

• Commission: 1,200 × 15% = 180
• Sales value excluding VAT: 1,200 ÷ 1.20 = 1,000
• VAT contained in the sale: 1,200 − 1,000 = 200
• Platform deductions: 180 + 10 + 60 = 250
• Payout after deductions: 1,200 − 250 = 950
• Profit in this model: 950 − 200 − 600 = 150

Enter these values in the marketplace commission calculator. Replace the illustrative rates with your own service and category terms.

Which sales value is the margin based on?

The tool divides the model's profit by the VAT-inclusive price: 150 ÷ 1,200 = 12.5%. Using the VAT-exclusive sales value would give 15%. Label the denominator when comparing reports. Read the margin versus markup guide for a separate comparison of sales-based and cost-based ratios.

What the model does not include

Commission is calculated on the entered selling price. The tool does not automatically model VAT on fee invoices, recoverable input VAT, withholding taxes, refunds, advertising, campaign contributions or settlement timing. VAT extracted from the sales price is not necessarily the net VAT payable to a tax authority.

Use consistent tax treatment for costs and fees. Do not add the same charge once as commission and again as a service fee. Reconcile estimates with actual invoices and settlement reports.

Test costs before changing a price

If shipping rises from 60 to 90, modelled profit falls to 120. If commission rises from 15% to 18%, profit falls by 36. A price discount also changes percentage-based commission, so recalculate the whole scenario.

Keep revenue, costs, deductions and cash received as separate figures. The VAT guide explains the arithmetic for separating inclusive and exclusive amounts; your transaction records determine the actual accounting treatment.