Marketplace: What are the possible scenarios for managing your merchants' commissions?

If the remuneration methods for marketplaces are varied, many operators choose to be remunerated through commissions. If this is your case, you will surely have been confronted with the different types of commissions and the various scenarios for managing them. To facilitate and optimise the management of your merchants' commissions, you can call upon a payment service provider (PSP), such as Lemonway, which will assist you in setting up your payment methods. What are the different types of commissions? When and how can they be taken? In this article, discover all the possible scenarios to manage your merchants' commissions!

What is the difference between merchant and marketplace?

A merchant is a business or individual that sells products or services directly to customers, either through their own website, physical store, or third-party platforms. They manage their own inventory, pricing, and customer relationships.

A marketplace, on the other hand, is a platform that connects multiple merchants (also called sellers) with buyers. Instead of selling its own products, the marketplace provides an infrastructure where different sellers can list and sell their goods. It typically facilitates transactions, ensures compliance, and may offer additional services such as payment processing, logistics, or customer support.

In short, while a merchant operates independently, a marketplace acts as an intermediary that enables multiple merchants to sell under one platform.

Marketplace: when and how do you collect commissions on your merchants' sales and services?

Reminder: On a marketplace, money-in refers to all incoming money and follows a specific circuit:

• Initially, the money arrives in your environment on a technical payment account.
• It is then distributed to your merchants' payment accounts
• The latter can recover their money by transferring it from their payment account to their bank account: this is called money-out.

Marketplace: 3 scenarios to recover commissions on your merchants' sales

1. Collect commissions on your merchants' sales at money-in

As soon as a payment arrives on your platform, you can add the amount of the commission to your company's payment account, which will have been previously defined with your merchants, also knows as the marketplace merchant fees. The rest of the amount is then transferred to the marketplace payment account before being redistributed to your merchants (or sellers).

2. Recover commissions on your merchants' sales at the time of money-out

You can also choose to collect commissions on your merchants' sales at the time of money-out. This means that when your merchant makes a money-out request from their payment account to their bank account, you can transfer your commission amount directly to your company payment account.

3. Commission your merchants' sales when transferring money to their payment account

Once the transaction amount has arrived on your marketplace's technical payment account, a dispatch is made between several payment accounts: the commission is paid to your marketplace's corporate payment account, while the rest of the amount is paid to your merchant's payment account.

Scenarios related to the payment method used

Depending on the means of payment used, not all schemes will be applicable.

• In the case of payment by credit card or direct debit: as the marketplace operator, you can indicate to Lemonway, via API, the amount of commission you wish to apply to the merchant. In this case, the PSP knows, at the time of money-in, the exact amount to transfer to the marketplace account and the company account.
• In the case of a bank transfer: you will not be able to use the commission-taking scenario at the time of money-in. Indeed, the buyer connects to his online bank to make the bank transfer from his bank account to the PSP's bank account. And this, without any intervention of the marketplace on the money-in. The commission will therefore be applied at the time of the transfer to the merchant's payment account or at the time of the money-out.

Advantage of a corporate payment account for managing your commissions

Using a PSP such as Lemonway to manage your commissions allows you to benefit from the company payment account. This is a space dedicated to the management of commissions. You can transfer and keep all your merchants' and marketplace commissions there. It is also from this payment account that you will be able to retrieve them and transfer them to your company's bank account.  

A complete dashboard, allowing a 360° view of the transactions

By choosing to equip yourself with a PSP such as Lemonway, you benefit from the dashboard tool to facilitate and visualise your commission management. A complete and flexible dashboard, in which you can consult the details of the commissions taken for each transaction: i.e., the commissions on the sales of your merchants and the commissions and the fixed fees taken by the PSP. Lemonway dashboard is a very flexible tool where all the information related to the activity of your marketplace can be viewed. It is, therefore, possible to filter all transactions by date, by amount, by product, by invoice... It is also possible to export data in different formats, which is a precious help for accounting. Moreover, the dashboard proposed by Lemonway is compatible with all accounting tools.

Lemonway: a scalable PSP ideal for managing commissions on your merchants' sales

In terms of commissions, Lemonway's solution is completely flexible and adapts to the way the marketplace wants to be paid. This way, commissions can be collected in the following ways:

• Automated: if the commission is charged at the time of money-in or transfer between payment accounts.
• Manual: if you want to smooth out the commissions on all payment methods.

As a marketplace operator, you can choose the amount of commission you want to charge. All you have to do is tell Lemonway the rate you want to charge for each type of transaction. Lemonway offers dedicated support at every stage of the project, providing you with tools that will not only facilitate the management of commissions daily but also make communication with your accounting teams easier! A project? Any questions? Tell us about your needs!