Unit Economics

Marketplace Fees versus Direct-to-customer Margins

Weigh the great trade-off of modern selling: a marketplace's built-in traffic against the huge cut it takes from every sale.

  • Intermediate
  • 7 min total
  • 11 chapters

What decision this helps you make: Whether to sell through a marketplace, direct-to-customer, or both — and how to protect your margin either way.

What this topic is

This is the core choice between selling on a marketplace (like Amazon) and selling direct-to-customer (your own store). Marketplaces hand you built-in traffic but take a large cut — Amazon's stacked fees reach ~50% of revenue; direct keeps far more margin but makes you pay to find every customer.

Why it matters

The marketplace's cut and your direct acquisition cost are the two sides of the same coin. Which channel actually keeps more money depends on whether you can win a customer for less than the marketplace charges to hand you one.

Who should learn it

Anyone selling physical products — deciding where to sell, how to price for each channel, and how to avoid being quietly squeezed by platform fees.

What you will understand

  • See how marketplace fees stack up to ~half of revenue
  • Compare a marketplace's take to your direct acquisition cost
  • Decide when marketplace, direct, or both makes sense
  • Protect margin and independence from platform fee creep

Prerequisites

Common misconception

"Selling on a big marketplace is basically free money — the customers are already there." Those customers cost you dearly: stacked marketplace fees can take half your revenue. The traffic is real, but you rent it at a very high price.