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The Rise of Wholesale Marketplaces

The Rise of Wholesale Marketplaces

The Rise of Handcrafted Wholesale Marketplaces

Meet Sally and Tom

Written by Jacqueline Adamany, VP IndieMe, Inc.

Handcrafted Wholesale Marketplaces are popping up everywhere. Every few months you hear of another marketplace where you can setup shop and sell your product line. Many of these marketplaces are commission based platforms. At first glance, that may be enticing to an artist. It will only cost you time to either set up your shop or send in your information letting the marketplace take care of it for you. Then you sit back and watch the orders come in, only paying when they do.

The appeal is fantastic, no orders = no payments. Many artists are lured into this model because let’s be honest here…paying money up front every single month with no guarantee you will recoup that money is not an attractive offer…or is it?

The Commission Model
Many marketplaces have selected the commission model for revenues. Why have they so much trust in a model where the marketplace admin has to split the earnings with vendors? Let’s introspect-

First admins get a share of every single order on the platform. For the marketplace, this model is a great way to win the vendors trust, no money spent unless money earned. For vendors no money paid unless orders are received is a safe bet. No money comes from the artist up front, so they feel confident this platform model is in their best interest.

But Is It?
Artist Sally makes jewelry and has been quite successful over the years. Her average order is around $325. She averages 3-5 orders per month. On a commission based platform where you can see rates from 0% - 25% - Sally see’s this scenario:

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