Whatnot has decided to make a major change to its commission fee structure, and this change specifically aims to help high-volume sellers keep more of every sale. The more a creator sells on the platform, the lower their commission rate will be.
There are many reasons the company may have implemented this change, such as to entice power sellers to stay on the platform and/or to better compete with its peers. But while the move is a clear win for large sellers on the platform, it remains to be seen how smaller sellers may feel about it.
Whatnot Changes Commission Rates to Reward High-Volume Sellers
Whatnot has just announced that selling more on the platform will soon earn creators a lower commission rate. Beginning on September 21st for existing sellers, and September 28th for new sellers, the company is changing how commission rates work on the platform.
As your sales increase and reach new thresholds, you’ll automatically unlock lower commission rates for your next four-week selling period.
This is one of Whatnot’s biggest changes for sellers, and it comes a few months after the platform partnered with Shopify to simplify live selling and make managing your operations even easier.
How Do the Commission Rate Changes Work?
When this new structure goes live, commission rates will scale alongside sales. The company will use your total sales in a four-week period to determine the rate you pay during the following four weeks. As a result, your rate can fluctuate frequently depending on how much you sell.
The standard commission rate for U.S. sellers with less than $15,000 in sales over four weeks is 8%. From there, the rates go down as follows:
- $15,000 or more in sales in four weeks earns a 7% rate.
- $35,000 or more in sales in four weeks earns a 6.5% rate.
- $50,000 or more in sales in four weeks earns a 5.5% rate.
- $100,000 or more in sales in four weeks earns a 5% rate.
- $250,000 or more in sales in four weeks earns a 4.5% rate.
- There are also custom tiers that can let sellers earn a commission rate as low as 3%.
This 3% rate is much lower than what many other platforms charge, which lets Whatnot sellers keep more of every sale they make.
Also, keep in mind that Whatnot only charges commission on the price of the items you sell, while some other platforms (such as the growing eBay Live, for example) use the price of the entire transaction, including things like taxes and buyer-paid shipping.
As a result, even the higher commission rates in this new structure are still fairly competitive with other platforms.
Potential Reasons for the Change
There are several reasons why Whatnot may have decided to implement such a major change to its commission rate structure. First, the move may have been made to help the platform compete with other heavy hitters in the live selling space, such as eBay Live and TikTok Shop. Specifically, it shows the company is serious about retaining top talent.
Sellers may often spend most of their time selling on the platform that gives them the most favorable rates, and thus the best chance to make the highest profit. Such friendly rates for high-volume sellers on Whatnot also put competitive pressure on other platforms and position Whatnot as the premier place for these sellers to operate.
The move could have also been implemented to reward those top-level sellers that have had such a huge role in helping the Whatnot platform grow and succeed.
Finally, letting sellers keep more of what they make encourages them to reinvest in their inventory and business growth in general, which indirectly benefits Whatnot and helps the platform grow and scale over time.
Our Take
A Win for Some Sellers, But Not All
With this move, it’s clear that Whatnot is doing all it can to keep its largest and most successful creators on the platform by offering them the lowest rates possible. But while this shows support to the biggest sellers, there are plenty of smaller sellers that won’t ever get to enjoy these lower commission rates, and may be stuck at the base 8% rate.
As a result, many small sellers may feel left behind, and this could alienate them and nudge them to other platforms if they feel like they’re an afterthought. Of course, it could also motivate them to improve their operations and reach those higher sales numbers to unlock better commission rates.
Only time will tell how this change impacts sellers on the platform, but the potential for better rates is always a win, and it should certainly help Whatnot keep most of its power sellers on the platform.
