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Q: Sales commission for an apparel ecommerce site. ( Answered 4 out of 5 stars,   0 Comments )
Subject: Sales commission for an apparel ecommerce site.
Category: Business and Money > eCommerce
Asked by: scott702-ga
List Price: $100.00
Posted: 03 Feb 2006 00:34 PST
Expires: 05 Mar 2006 00:34 PST
Question ID: 440824
I'm in the business planning stages of an apparel site that will sell
clothing and accessories for men and women. I will not carry any
inventory. my site will just process orders and I will pass those
orders on to a retail partner or manufacturer for order fulfillment. A
good example of this model is the and Nordstom
relationship. takes the order and passes it along to
Nordstroms for fulfillment (unlike the standard linking or affiliate

My question is; What percentage of each sale should I expect as a
commission on this type of transaction?

I'm assuming since my site will be passing on orders, not leads, that
the commission would be quite a bit higher than that of an affiliate.

Look forward to the response.
Subject: Re: Sales commission for an apparel ecommerce site.
Answered By: jbf777-ga on 03 Feb 2006 09:47 PST
Rated:4 out of 5 stars
Hello -

Considering your arrangement is like Amazon, and Amazon is the
absolute premier online leader of this commission arrangement, their
revenue model would be the best one to mirror.

" is able to generate gross profit margins of at least 75
percent on the [6%-15%] commissions it charges retailers, according to
an estimate by Paul Keung, an analyst at CIBC World Markets.  Keung
expects to report net income of $93.3 million, or 22 cents
a share."(1)

Amazon's commission rates are between 6 and 15 percent, depending on
the item being sold:

                               Computers | 6 percent
  Camera & Photo, Cell Phones & Service, 
                   and Electronics items | 8 percent
      Items in the Everything Else Store | 10 percent
                     Musical Instruments | 12 percent
                 All other product lines | 15 percent   <---

There's also an additional closing fee that they realize on each
transaction, tied to the shipping rate, which ranges from a fixed $.65
to $0.65 + $0.10/lb.

Somewhere in the range of 15 percent would be a good starting point
for your business.  You could also charge a monthly or yearly fee in
addition to this, such as Amazon's Pro Merchant Subscription
($39.99/mo.), which could offer subscribing merchants additional
perks, such as a waivering of the $.99 fixed closing fee, and
streamlined inventory/listing control.

If you have any other questions, please don't hesitate to ask before
rating this answer.

Thank you,


Sources/Search strategy:
Amazon: 877-251-0696
Help > Selling at > Listing Your Item > Fees and Pricing's Bezos Turns to Starbucks, Bombay to Boost Profit

Request for Answer Clarification by scott702-ga on 03 Feb 2006 19:47 PST

Thank you for your prompt response. 

I just want to be clear on one point that involves the numbers referenced.

Let's say an associate is on a 5% referal rate fee, and
that assoicate's link sells a computer which generates a commission of
6% (based on your numbers) for Amazon.  Not including the closing fee
that you mentioned, Amazon would realize a 1% net commission (after
passing on 5% to the associate) off of this sale?



Clarification of Answer by jbf777-ga on 04 Feb 2006 09:02 PST
Hi Scott -

Those numbers are the exact numbers that Amazon realizes from the
transaction sold.  Seller ABC signs up to be a seller with Amazon.  He
sells a computer product for $100, Amazon takes 6% of that, or $6.00
(plus closing fees).  The seller keeps the remaining portion.

Let me know if you need any clarification.

scott702-ga rated this answer:4 out of 5 stars

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