Commission model

When it comes to online marketplaces, your purchase involves more than just compensating the seller. The marketplace itself also seeks to generate revenue and typically takes a percentage of the transaction price. A commission model refers to the system by which the platform compensates its partners, such as sellers or vendors, based on the revenue they generate within the marketplace.

This structure outlines how these partners are rewarded for specific actions, such as successfully closing sales, attracting traffic to the marketplace, or providing qualified leads that result in transactions. The commission model not only specifies the typical amount of compensation for these actions but often incorporates mechanisms for scaling the compensation as the overall revenue of the marketplace grows. A seller who contributes to marketplace success may therefore receive an equivalent reward.