Why Do We Hate Transaction Fees?

They Create an Incentive for Removing Customer Contact

eBay and Etsy make it very clear in their policies that all purchases must be completed on their platform. Business owners who violate this policy risk paying fines or even having their store removed in severe cases.

So how do they limit the possibility for customers to take their purchases off the platform?

Simple, they remove most of the contact info for the store-owner, only permitting contact through the platform contact form. The business owner can’t display their address, phone number or email address for external communication.

They also prevent you from displaying your social media accounts directly to your customers, stifling your ability to grow a social media following.

They Create an Incentive to Promote a Limited Number of Sellers

Whenever a company earns it’s revenue as a percentage of transaction volume, and 80/20 pattern inevitable occurs. The company becomes reliant on the 20% of storefronts that end up earning 80% of the companies revenue. Most advertising efforts and features the company makes to improve it’s platform will be focused on this small subset of the customer base.

Under a transaction fee system it can be very difficult for new sellers to grow.

The My Community Made system circumvents this issue by focusing on local proximity first rather than transaction volume. New sellers receive just as much exposure as other sellers on the platform within their local community.

They Penalize Sales Growth

Another reason these platforms try to limit your customer contact to only the sales platform is due to the fact that eventually transaction fees WILL become the largest cost for operating your online store.

Tying up 5% of a sellers income in transaction fee cuts into their ability to lower prices as they become more efficient. Additionally, as the seller becomes able to afford alternative sales avenues (custom website, physical store) they will not have the connection to customers necessary to bring those customers to their new sales platform. This keeps the seller reliant on the sales platform to keep in touch with their existing customers and to gain new customers.

My Community Made encourages sellers to interact with customers directly. Our sellers can easily grow their social media platform through their storefront. Our sellers can even export their product lists easily if they decide to move their store.

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