My partner and I are developing a marketplace website that connects retailers with product makers, allows them to communicate with each-other and hosts wholesale transactions-we are looking for advice on how much to charge for our website.
What we know: the standard fee for retail brokers, has a range of 5-15% off of wholesale transactions. For the website to make money as an active whole-selling community, we decided a transaction fee on each purchase would be the most realistic and fair method (as we can't justify charging a subscription fee at this point). The number we came to was a 7% fee- 5% to the person selling the goods-and 2% to the buyer of the goods.
We feel somewhat comfortable with this number as our rough calculations indicate it will help with operations costs. However, we were hoping to gain some insight from the OnStartups community:
- Does 7% (fee to sellers & buyers) seem like a reasonable transaction fee for an online marketplace of this nature?
- Does it make sense to charge the buyers as well?
- Are there typical ways startups decide on transaction fees or is it more or less trivial at the beginning?
Any help and advice would be greatly appreciated.