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We shared with brands that we’re updating Faire’s pricing structure in North America effective July 5, 2023.
Read our announcement email here in case you missed it.
To help you understand what’s changing, why, and what it means for you, we’ve put together this guide with a little more detail:
- What is and isn’t changing about Faire’s North America pricing structure?
- How will the new pricing affect my business?
- What does each part of the pricing structure cover?
- Why is Faire making these changes?
- How are payouts calculated under the new pricing?
- How do I select my payout option?
- How should I think about selecting a payout option?
- How should I think about my opening order minimum?
- Where can I see the commission and payment processing fee for each order?
- FAQs
What is and isn’t changing about Faire’s North America pricing structure?
What’s changing:
- We’re lowering our opening order commission from 25% to 15% and adding a $10 new customer fee.
- We’re introducing a payment processing fee that will apply to all orders to cover fees paid to third-party payment processors and other costs related to managing on-time payments. The fee will be based on how quickly you choose to get paid out—next-day, 30-day, or 60-day. It will replace our current next-day payout fee that some brands have opted into.
We’ve updated our Brand Terms of Service to reflect these changes—they’ll take effect July 5.
What’s not changing:
- You’ll still pay 0% commission on Faire Direct orders from customers you bring to Faire.
- You’ll still pay 15% commission on reorders from customers who discovered you on Faire.
- You’ll still have the benefits you love about Faire—flexible payment terms for retailers, free returns on first orders, and first-time buyer incentives, along with the tools to streamline your business, like easy order management, retailer verification, and marketing/CRM tools.
How will the new pricing affect my business?
Generally, most brands will pay less overall on marketplace orders under the new structure even with payment processing fees added, since the new customer fee doesn’t grow with the opening order size.
The week of May 15, brands with enough order data on Faire will receive a personalized email to help them understand the impact of these changes to their business. You can also explore ways to lower your costs under the new structure in the payout option and opening order minimum sections below.
What does each part of the pricing structure cover?
Our new pricing structure includes two components: commission and a payment processing fee.
Commission: You’ll pay commission to Faire when you get orders from customers who discover you on Faire’s marketplace.
What you pay on commission enables us to run a great marketplace that makes it easy for retailers to buy (and buy again), while giving you tools to streamline your business, like easy order management, retailer verification, and marketing and CRM tools. It also enables us to develop and launch new features that will help you grow your business.
The additional $10 new customer fee on opening orders helps us cover the costs of driving retailers to discover your brand, like incentives for first-time buyers, offering free returns on first orders, and additional marketing that helps new retailers discover you and your products.
Faire waives the commission on orders you get from existing customers or leads you sourced through your Faire Direct link.
Payment processing fee: You’ll pay a payment processing fee on each order under our new pricing structure. The fee is based on how quickly you want to get paid out—next-day, 30-day, or a new option of 60-day. It replaces our current next-day payout fee that some brands have opted into.
The payment processing fee covers third-party processing fees and other costs such as guaranteeing on-time payments and managing retailer 60-day payment terms, fraud, late payments, and defaults. Please see our updated Terms, which take effect July 5, for details.
Why is Faire making these changes?
To build Faire into a thriving wholesale marketplace over the past six years, we’ve absorbed certain costs—including fees paid to third-party payment processors—even on orders where we take no commission.
Our long-term vision is to build the world’s best independent wholesale marketplace to empower entrepreneurial brands like yours. To execute on this vision, we’re realigning our pricing structure with our costs to ensure we set the right foundations for the future.
We’re excited to continue investing in new programs, tools, and incentives to help drive larger, more consistent orders to your brand over the years to come.
The payment processing fee we’re now charging covers third-party processing fees and other costs such as guaranteeing on-time payments and managing retailer 60-day payment terms, fraud, late payments, and defaults. And lowering our opening order commission and adding a new customer fee will help us reduce the pressure many brands feel on their margins, while still allowing us to cover the costs of creating new relationships on Faire.
How are payouts calculated under the new pricing?
Both commission and the payment processing fee are calculated based on your order subtotal, which is the cumulative wholesale cost of the items in your order minus any promotions you fund yourself.
You can see example payout calculations below for an opening order, a reorder, and a Faire Direct order under the new structure—these examples show what a $200 order would look like for a brand with 30-day payout.
Note that your order subtotal includes any promotions funded by you as the brand but does not include Faire-funded promotions, retailer credits, shipping paid by retailers, ship-on-your-own brand shipping refunds, or taxes and duties.
How do I select a payout option?
Visit the Payout tab in Account Settings to review and update your selected payout option. If you don’t make any changes before July 5, you’ll be defaulted to your current payout speed and the corresponding payment processing fee. You can update your payout option at any time.
If you haven’t yet received an order on Faire you’ll be able to select your payout option when your first order comes in.
How should I think about selecting a payout option?
Under this new pricing structure, you’ll be able to select the payout option that works best for your business. Each payout option—next-day, 30-day, and our new 60-day payout—will have a different associated payment processing fee.
Faire’s scale allows us to keep third party processor costs low. If you select 30-day or 60-day payout, we expect your payment processing costs through Faire will be lower than selling through other channels, but with the additional benefit of on-time payments and the ease of offering retailers many payment options. If you select next-day payout, your payment processing costs may be slightly higher than they are on other channels due to the additional benefits our fee covers.
How should I think about my opening order minimum?
Opening order minimums play a large role in helping brands get discovered on Faire, and we hear from retailers that low order minimums are an important factor when deciding to try a new brand. That said, you may be wondering how you should think about your opening order minimum given our new opening order commission involves a flat fee and not just a percentage.
Generally, we recommend setting opening order minimums in the $100-150 range under the new pricing structure as we find that this range balances growth and margin. Below are example orders within that range to demonstrate how your commission would compare across them.*
*Note that we do not include payment processing fees in the comparison above, as changes to your total payouts accounting for payment processing fees will depend on what payout speed you use today and what option you select in the future.
If your opening order minimum is lower than the $100-150 range, we recommend reviewing your numbers to ensure your take home pay will remain sustainable in light of the new opening order commission. You can consider updating your opening order minimum when the new pricing takes effect, or evaluating your sales numbers after a few months. It may be worth keeping your minimum relatively low, since you’ll only pay $10 to acquire a new customer relationship.
If your opening order minimum is above the $100-150 range, the opening order commission change will likely benefit you. You could even consider lowering your opening order minimum to help drive conversion, while still maintaining higher opening order margins than you have today.
Note that these recommendations are for opening order minimums only and do not apply to reorder minimums. We hope this information helps you better understand the impact of our pricing update on your business, but we know every business is different. We recommend reviewing your own data before making any decisions. <
Where can I see the commission and payment processing fee for each order?
Starting July 5, once an order is placed, you’ll be able to see its commission rate and payment processing fee as line items on your Orders page and Payouts page, as well as the downloadable CSV payouts export. You can see screenshots below of these pages and an empty template version of what the CSV payouts export will look like.
Order detail page
Payout page
Payout export
The downloadable CSV payouts export file you access from the Payouts page will be updated starting July 5 to reflect the new pricing structure. View the new file template here, along with the current template for comparison.
FAQs
Who is and isn’t affected by this pricing change?
These pricing changes apply to brands based in the United States and Canada. They do not apply to brands based in other locations.
When will this pricing change take effect?
The pricing changes will take effect on July 5 at 12:00 a.m. EST, 2023. Orders created on or after this date will follow the new pricing structure.
How does the payment processing fee interact with today’s 3% next day payout fee?
The new payment processing fee will replace the current next-day payout fee that some brands have opted into. If you’ve opted into next-day payouts and would like to continue, it will now cost 3.5% + 30¢, instead of 3%. You will also be able to choose a 30-day or 60-day payout option if you’d like to lower your fee.
What’s changing about Faire’s Brand Terms of Service?
We’re updating our Brand Terms of Service effective July 5 to reflect the new pricing structure in the US and Canada that also takes effect on July 5. The updates to our Terms include the pricing changes outlined here: a) changes to our opening order commission and b) the addition of a payment processing fee on all orders. To continue using Faire from July 5 and beyond, you’ll need to review and accept these new Terms when prompted in your brand portal.
Still have questions?
Feel free to reach out to us here, and we’ll be happy to help answer any other questions.
