Marketplace, the online marketplace owned and operated by Meta (formerly Facebook), allows people to buy and sell new or used items through its platform. Marketplace takes a percentage of each completed sale as a service fee. This commission ranges from 5% to 20% depending on the item category.
Service Fee Structure
Marketplace’s service fee structure is based on the item category. Here are the commission rates Marketplace charges per category:
5% Category
– Books
– DVDs and Movies
– Music
– Video Games and Consoles
For items listed under these categories, Marketplace will take 5% of the total sale price as commission. For example, if you sell a used book for $10, Marketplace will deduct $0.50 from your payout.
15% Category
– Auto Parts and Accessories
– Baby Products
– Clothing and Shoes
– Handbags and Accessories
– Health and Beauty
– Home Goods
– Kitchen and Dining
– Sporting Goods
– Toys and Games
– Vintage
Items listed in the above categories have a 15% transaction fee. If you sell a $50 kitchen appliance, Marketplace will take $7.50 as the service fee.
20% Category
– Antiques
– Arts and Crafts
– Collectibles
– Home and Garden
– Musical Instruments
– Office Supplies
– Pet Supplies
– Specialty Services
– Sporting Equipment
– Tickets
For items that fall under these categories, Marketplace’s cut is 20% of the sale price. For instance, if you sell event tickets worth $100, Marketplace will deduct $20 from the transaction.
Fee for Shipping
In addition to the category-based service fee, Marketplace also charges a shipping fee in some cases:
– If you use Marketplace’s prepaid shipping labels to ship an order, you will be charged the actual shipping cost plus $0.40 per label.
– For items you sell through the Local Pickup option, Marketplace will deduct 5% of the sale price as a service fee.
– If you arrange your own shipping without using Marketplace’s labels, no shipping fees will be deducted.
How Seller Payouts are Calculated
Marketplace calculates the payout to sellers by deducting all applicable fees from the item’s selling price. Here are the key steps:
1. Marketplace service fee
Based on the category, Marketplace will first deduct 5%, 15%, or 20% of the sale price as its commission.
2. Shipping fee
If you used Marketplace’s prepaid shipping labels, the actual shipping cost + $0.40 per label will be deducted. For Local Pickup orders, 5% of the sale price will be deducted as the shipping fee.
3. Processing fee
A payment processing fee of $0.30 + 2.9% of the total selling price will also be deducted. This fee goes to Meta’s payment processing partner.
4. Applicable taxes
If the sale is taxable, Marketplace will deduct any sales tax to be remitted to the tax authorities.
5. Calculate payout
After deducting the above fees from the sale price, the remaining amount will be paid out to the seller’s chosen payout method.
Here’s an example calculation:
Sale Price: $100
Category: Home Goods (15% fee)
Shipping: Prepaid label ($15 cost + $0.40)
Marketplace Fee: $100 x 15% = $15
Shipping Fee: $15 + $0.40 = $15.40
Processing Fee: $0.30 + $100 x 2.9% = $3.60
Payout: $100 – $15 – $15.40 – $3.60 = $65.00
In this example, the seller would receive a payout of $65 for the order.
Policies on Refunds and Cancellations
If an order is canceled or refunded after payment processing, any fees deducted by Marketplace will not be reversed or refunded to the seller.
However, if the cancellation happens before payment processing, Marketplace does not charge any fees.
For returns due to defective, damaged, or wrongly described items, Marketplace refunds its fees proportional to the refund amount. Sellers need to accept returns within 3 days.
How Marketplace Payments Work
Marketplace offers sellers an integrated payment processing system to easily manage transactions and payouts. Here are some key points:
– Buyers can pay instantly with credit/debit cards, Facebook Pay, and other methods.
– Sellers don’t process payments directly. Marketplace handles collecting payment from buyers.
– Payouts are deposited to the seller’s bank account weekly if the amount is over $5.
– Sellers can track sales and payout status through their Marketplace Seller Dashboard.
– Marketplace payments require sellers to complete identity verification for security.
Policies for Prohibited and Restricted Items
Marketplace prohibits the sale of certain items due to legal, safety or policy reasons. Prohibited items include:
– Alcohol and tobacco
– Animals and pets
– Counterfeit products
– Drugs and drug paraphernalia
– Firearms, weapons, and explosives
– Live animals
– Pornographic and adult content
– Stolen property
– Other illegal, dangerous, or infringing items
Selling prohibited items can result in permanent ban from Marketplace. Restricted items like health products, cosmetics, and used personal care require prior authorization.
Tips to Reduce Marketplace Fees
While Marketplace fees are mandatory, sellers can employ some tips to reduce the burden of commissions.
– Price items strategically above your target price so there is room to offer discounts and still earn the expected amount.
– Offer bundled listings where the fees apply only to the base item price, not any extras.
– Use Local Pickup where possible to avoid shipping fees.
– Maintain high seller ratings and positive reviews to unlock lower 10% fees from Marketplace.
– Sell in high-demand categories like auto parts, electronics, computers etc. where buyers don’t mind paying higher prices.
Conclusion
Marketplace deducts 5% to 20% commission on each sale depending on the product category. Additional shipping and processing fees may also apply in some cases. While sellers have little control over the rates, they can employ pricing strategies and bundling to reduce the impact. Maintaining quality listings and high seller ratings can also help unlock lower 10% fees from Marketplace.