There are a few important things to know as you set up your prices.
The Sale Price is the amount that the buyers will see when they are shopping. This amount is fixed. All your fees will be calculated on the Sale Price.
The Net Price is the amount that the sellers will receive. This amount is an estimate, calculated by subtracting your market fee and any applicable transaction or payment processing fees from the Sale Price.
Let’s say your market has a 20% market fee and a 3% credit card fee. If you set the Sale Price for a product is $1.00, then there will be $0.23 worth of fees, and the Net Price will be $0.77.
The fees will break out as follows:
- Market Fee: $0.20 (20% of the Sale Price)
- Payment Processing Fee: $0.03 (3% of the Sale Price)
In this example, when a buyer places an order for your product, the Sale Price will always be $1.00. The Net Price will be at least $0.77.
The net price might be slightly higher if the buyer uses a different payment method at checkout (ACH has a 1.3% fee, and a Purchase Order has no fee). Since the system can’t know how a buyer will pay for an order, it estimates the Net Price to be the minimum amount that the seller will earn. The Net Price estimate is a reference point which takes the maximum potential fees into consideration so that the sellers can make more informed pricing decisions.