Faire vs. Your Own Wholesale Portal: Fees, Terms and Payouts
Faire vs. your own wholesale site: compare commission against net terms risk and card fees, then see the break-even math at three sales levels.
Photo: Pixabay
On this page 6 sections
- How Faire's Commission for Brands Works
- What Faire Absorbs in Exchange for Its Commission
- What a Wholesale Ordering Portal Costs to Run
- Offering Net Terms Yourself or Through Faire Alternatives
- Moving Existing Retailers off Faire Without Penalties
- Faire vs. Your Own Wholesale Site: Break-Even at Three Volumes
Key takeaways
- On a platform that extends retailer credit, the retailer's net terms and your payout schedule are separate agreements. Your brand agreement sets when you get paid.
- Calculate your effective commission separately for retailers the marketplace matched with you and for retailers you brought. Usually only the second group can move.
- In our illustrative model, own-portal cost as a share of sales falls as volume grows, because software and admin time are mostly fixed.
- Read the off-platform and pricing parity clauses before you invite any retailer to your portal.
Faire vs. your own wholesale site comes down to one trade. Faire charges a commission on most orders, and the rate can depend on how the retailer found you. For that commission, Faire brings you retailers and carries the credit risk when it lets them buy on terms. It also collects their payments and pays you on its own schedule. A wholesale ordering portal of your own lets you keep the commission, but each of those jobs becomes yours, and none of them is free.
For retailers you already have and are allowed to move, your own portal often costs less once your volume covers the fixed costs. For retailers the marketplace found for you, the commission works more like a marketing expense, and your contract may not let you move them anyway.
The sections below price both sides. Faire's commission rates and payout timing change over time and can differ by account. Wherever a Faire number matters, take it from your own brand agreement and payout reports rather than from a blog post, including this one.
How Faire's Commission for Brands Works
Faire deducts its commission from each wholesale order before it pays you. The rate is not always a single number. It can depend on how the retailer reached you. A store that Faire matched with your brand through the marketplace is usually treated differently from a store you invited through your own link, and under some programs invited orders carry a reduced commission or none at all. First orders and reorders can also be treated differently. Your fee schedule spells this out. These rules get revised, so check it again before you build a business case on it.
A headline rate also hides your real cost. To find your effective commission, take a year of payout reports and divide total commissions plus any platform fees by gross wholesale order value. Then run the same calculation twice: once for marketplace-matched retailers and once for retailers you brought. Those two numbers drive every decision later in this article.
What Faire's Retailer Net Terms Mean for Your Cash
Brands often assume that when a boutique checks out on extended payment terms, the brand waits until the end of the term for its money. On a platform that extends credit to retailers itself, it doesn't work that way. Two separate agreements are in play. The retailer owes the platform under the retailer's terms. The platform pays you under your brand agreement, typically after the order ships, whether or not the retailer has paid yet.
Read the payout section of your agreement for the exact timing and for any conditions, such as proof of shipment. This part of Faire's value is easy to undercount. Under that kind of arrangement, a retailer can take its full term while your payout follows the schedule in your agreement.
What Faire Absorbs in Exchange for Its Commission
The commission buys more than a listing. Here is what the platform handles that you would otherwise handle yourself:
- Credit risk. If a retailer buying on platform terms pays late or never pays, the platform carries that loss, subject to your agreement. On your own portal, a small shop that closes with an unpaid invoice leaves you with the bad debt.
- Payment processing. The retailer's card or bank payment goes to the platform. You get no separate merchant statement for those orders, and the processing cost is built into the commission. Check your payout reports for any line-item fees on top of it.
- Collections. Nobody on your team chases invoices or matches incoming payments to orders.
- Retailer discovery. The marketplace puts your line in front of buyers you would otherwise reach only at trade shows or through reps.
- Returns and damage claims. Each platform sets its own rules for opening-order returns and damaged goods, and those rules decide who absorbs the cost. Read yours, because the answer changes the comparison.
That bundle is what your own portal has to beat. If you compare the commission only to a card processing rate, the portal looks far cheaper than it really is.
What a Wholesale Ordering Portal Costs to Run
A working wholesale ordering portal needs more than a consumer storefront. Buyers expect a login-gated catalog with case packs and minimum order quantities. Pricing should follow the account rather than a public price list. Resale certificates need to stay on file, a job covered in our guide to collecting and verifying buyer resale certificates, and a reorder should take a couple of clicks.
Many brands build this on an e-commerce platform such as Shopify or WooCommerce, using its B2B features or an app, and then connect a payment gateway. Choose a gateway that can store cards for repeat orders and accept bank payments. That way buyers can pay at checkout or settle an invoice later.
The software, though, is the smaller cost. These are the bigger ones:
Card processing. Wholesale buyers pay with business and commercial cards far more often than consumers do, and those cards generally cost more to accept than consumer debit. Sending extra transaction data can lower the cost on some commercial cards. Our guide to Level 2 and Level 3 processing for B2B card costs explains which cards qualify. When you compare processors, use the all-in effective rate instead of a quoted rate.
ACH. A bank transfer usually costs a flat amount per payment. On a typical wholesale order, that comes to a small fraction of what a card costs. In exchange, settlement is slower, and a payment can come back for insufficient funds.
Passing costs on. Some wholesalers add a card surcharge or give a discount to buyers who pay by bank transfer. Surcharging is governed by card network rules and by state law. It requires disclosure and isn't allowed everywhere. Read how to pass credit card fees to customers on B2B invoices, and confirm the details with your processor and a qualified advisor before you change your invoices.
Admin time. Credit reviews and collections calls take someone's hours every month. Matching payments to invoices takes more.
Offering Net Terms Yourself or Through Faire Alternatives
Independent retailers placing opening orders for the holidays, often months before the season, expect terms. Without them, many will order less or not order at all. Other wholesale marketplaces exist, but for a brand that wants to sell direct, the practical Faire alternatives are ways to offer terms without a marketplace in the middle.
Carry the terms yourself. You approve each account and set its credit limit, then wait to be paid. You keep the whole margin, but you also take on the bad debt, and your cash sits in receivables until buyers pay. A proper trade credit application for vetting buyers before net 30 protects you more than any payment tool. Brands that sell to a few dozen established stores they know well often manage this without trouble.
Use a third-party B2B terms provider. These services approve the retailer and pay you upfront minus a fee. They then take on the collection risk. The fee generally rises with the length of the term. In effect, you get the platform's credit model without the marketplace. That makes it worth pricing out if you sell to many small boutiques you can't vet one at a time.
Keep a card on file as a backstop. Some brands ship on net 30 but store a card, with the buyer's written authorization, and charge it if the invoice goes past due. Our guide to B2B credit card authorization forms for wholesale accounts covers what that authorization should say.
Reward early payment. A small discount for paying early can bring cash in faster than terms alone. Our piece on pricing 2/10 net 30 against card fees shows how to set that discount so it doesn't cost more than the card would have.
Most brands end up combining these. They carry terms themselves for proven accounts and use checkout payment or a financing provider for everyone else.
Moving Existing Retailers off Faire Without Penalties
This is where brands get into trouble. Marketplace agreements commonly bar brands from steering platform-introduced retailers to order elsewhere, and some also require pricing parity between channels. Breaking these provisions can bring whatever consequences your agreement spells out, which may include fees or losing your account. Read the off-platform and pricing sections of your current brand terms before you contact anyone. Have a lawyer review anything that is unclear.
Then sort your retailer list by origin:
- Retailers you brought to the platform yourself, such as existing accounts you invited with your own link. You usually have the most room to sell to these directly, subject to your agreement.
- Retailers the marketplace matched with you. Unless your agreement allows otherwise, leave these on the platform and treat their commission as the price of having found them.
When you invite eligible accounts to your portal, give them a reason to switch. If parity rules apply, that reason can't be lower prices. Faster shipping, early access to new SKUs, lower reorder minimums or a quicker reorder button can do the job instead. Time the move for a reorder cycle, not the weeks before a holiday buying deadline. Expect some retailers to stay put because they value the platform's terms more than anything you can offer, and build that lost volume into your plan.
Faire vs. Your Own Wholesale Site: Break-Even at Three Volumes
The tables below are illustrative. They estimate what running your own portal would cost a brand at three annual wholesale volumes. None of the numbers comes from Faire or from any processor's price list. They are placeholders for you to replace with your own.
| Illustrative assumption | Value used |
|---|---|
| Average wholesale order | $500 (100, 500 and 2,000 orders a year) |
| Sales paid by card at checkout | 50%, at a 3.0% all-in effective rate |
| Sales on net 30 terms you carry | 50%, paid by ACH at $1 per payment |
| Bad debt | 2% of terms sales |
| Receivables outstanding | 40 days on average, financed at 10% a year |
| Portal software | $100, $300 and $1,000 a month by volume |
| AR and credit admin | 5, 15 and 40 hours a month at $30 an hour |
The carrying cost line is terms sales × days outstanding ÷ 365 × the financing rate.
| Own-portal cost (illustrative) | $50K | $250K | $1M |
|---|---|---|---|
| Portal software | $1,200 | $3,600 | $12,000 |
| Card processing | $750 | $3,750 | $15,000 |
| ACH on terms invoices | $50 | $250 | $1,000 |
| Bad debt | $500 | $2,500 | $10,000 |
| Cost of carrying receivables | $274 | $1,370 | $5,479 |
| AR and credit admin time | $1,800 | $5,400 | $14,400 |
| Total | $4,574 | $16,870 | $57,879 |
| As a share of sales | 9.1% | 6.7% | 5.8% |
| Each 5 points of platform commission equals | $2,500 | $12,500 | $50,000 |
The share-of-sales row is your break-even commission. If the effective commission on retailers you could legitimately move is above that row at your volume, your own portal costs less on paper. At the smallest volume, fixed software costs and admin time push break-even highest. A small brand therefore needs a wider commission gap before switching pays off.
The model leaves several costs out. It includes nothing for finding new retailers: no trade show booths, samples, reps or ads. It ignores returns. It also assumes your retailers order just as much after they lose platform terms. Any of these can close the gap. The result is also sensitive to payment mix. Shifting buyers from card to ACH lowers processing cost, while carrying more sales on terms raises bad debt and carrying cost.
To make the model yours, replace each assumption with your own figures. Then compare the total with the effective commission you calculated from your payout reports, split by retailer origin. Our guide to what wholesale distributors should pay in card fees covers wholesale card pricing in more depth.
Start with the payout reports. Calculate your effective commission for each retailer group. If the movable group clears your break-even, get the processing side of a portal priced. Request a free quote, and a MannyPay specialist will reply within one business day about card processing and online payment acceptance for your wholesale channel.
This article is for general educational purposes and is not legal, tax or financial advice. Card network rules and state laws change; confirm current requirements for your business.
