As a cross-border seller, the main way to make a profit is to sell products on a third-party platform and earn the price difference. However, as a third-party intermediary platform, there are more channels for making profits, mainly including the following.
(1) Basic service fee. The service fee mainly refers to the fee charged by the platform when providing sales service functions to sellers. Different platforms have different names for this service fee. For example, depending on the different business scope, the AliExpress platform charges each store an “annual technical service fee” of RMB 10,000 to 100,000 (after reaching a certain annual sales volume, 50% or 100% of the service fee can be returned).
eBay requires “store fees” and “listing fees”. eBay seller stores are divided into five types: Starter Store, Basic Store, Premium Store, Anchor Store and Enterprise Store. There are two charging methods: monthly and annual. The number of free listings per month, the proportion of listing fees and transaction fees charged by stores of different levels are all different. The higher the store level, the more free listings you can get, and the lower the rates for other fees.
In addition, some platforms charge for special features. For example, in order to attract buyers’ attention, eBay allows you to set the title in bold and set a subtitle (a subtitle is a slightly smaller title in light gray font below the title), but charges a fee of US$0.5 to US$6 depending on the situation. For auctions, if a reserve price is set, if the reserve price is less than US$75, the fee for the reserve price function is US$3. If the auction exceeds US$75, the fee for the reserve price function is 4% of the auction price. However, it does not exceed US$100. If the auction duration is set to 1 or 3 days, an additional US$1 will be charged.
(2) Commission. When a cross-border transaction is completed, the third-party B2C platform will charge a certain commission for the transaction, which is also the main source of profit for many platforms. For example, AliExpress has two main commission rates: 5% and 8%; eBay has multiple “transaction fees” of 3.5%, 4%, 6.15%, 7.15%, 8.15%, and 9.15%; and Amazon has multiple commission rates of 7%, 8%, 10%, 12%, and 15%.
(3) Advertising promotion fees. In order to increase product exposure and sales probability, third-party cross-border B2C platforms generally set up many internal paid promotion services. For example, AliExpress launched the “through train” function, where sellers can bid to purchase keywords. When consumers search for keywords, sellers with higher bids will rank higher and display product information for free, but the price is charged on a click-through basis, that is, when consumers click to view the product once, the seller needs to pay the bid amount, regardless of whether the transaction is completed in the end.
Some platforms charge promotion fees based on the final transaction results. For example, on eBay, a promoted listing is set up, and the product will be promoted and appear in certain specific locations. Only after the product is successfully sold through the promotion will eBay charge a corresponding commission. If the product is only clicked but not sold, no advertising fee will be incurred. A promotional commission rate of 1% to 20% can be set for promoted listings, and this commission is charged as a certain percentage of the transaction price, excluding logistics costs.
(4) Logistics and warehousing fees. Some platforms can provide logistics and warehousing services, but sellers need to pay certain fees. For example, when using Amazon’s FBA (Fulfillment By Amazon) service, delivery fees, monthly storage fees, and inventory configuration service fees will be incurred. Logistics and delivery fees (including “order processing fees”, “pickup and packaging fees”, and “first weight and additional weight fees”) are generally charged per piece, and the amount of each piece is related to the weight and size of the product. The monthly storage fee is charged in proportion to the product size. The inventory allocation service fee refers to the fact that when using the FBA service, Amazon will randomly distribute the seller’s products to multiple warehouses by default. If the seller finds it troublesome to distribute the products, they can first set up a warehouse consolidation. If a warehouse consolidation is set up, Amazon will charge a fee per piece. The specific fee depends on the selected warehouse destination and the number of products (of course, if a warehouse consolidation is not set up, this fee will not be charged).
(5) Other service fees. For example, some platforms will provide translation, trademark registration, tax agency and other services, which will charge corresponding fees.