If the market charges a sales commission, should I raise prices?
Commission fees reduce net margin, so decide whether to offset them with pricing or product mix.
The Narrative
The Empathy
When a market takes a sales commission, it cuts into your profit on every sale. For example, a 10% fee means a $50 sale nets you $45. If your profit margins were already tight, the commission can really hurt. The question is: should you simply raise your prices to cover the fee, or try something else?
The Education
Treat the commission like a variable cost. There are two main approaches:
- Small price increase: You might raise your prices by roughly the commission rate so your net stays about the same. Do the math and make sure the new price still feels fair for the customer.
- Adjust your product mix: Showcase your higher-margin or premium items at markets with commission fees. You might avoid offering very low-priced items there. In short, shift focus to products where the post-commission profit remains acceptable.
The Solution
If possible, keep your prices consistent across venues to avoid confusion. If a market’s fee is unusually high, consider special bundle offers or a different product assortment so the price difference is less obvious. Clear signage or explaining extra value (like free gift wrap or bonus items) can help customers understand the pricing.
Finally, look at the bigger picture. If the fair draws a lot of customers, it may be worth absorbing some fees as a cost of doing business. But if, after fees, your net margins are too low, it’s time to raise prices slightly or reevaluate attending that venue. Track net sales by booth so you know how commissions affect profit and can adjust before fees surprise you.
Stop Guessing. Start Growing.
Stop waiting until the end of the month to see if you made money. Get instant clarity on every sale, even without Wi-Fi.
