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Operator Notes · 3 min read

Amazon or Your Own Store: The Economics Nobody Models

Running the same catalogue on a marketplace and on our own store showed how differently the margin behaves once every fee is counted honestly.

The short answer

Marketplace revenue and own-store revenue are not comparable numbers, and treating them as though they are is how brands conclude the marketplace is winning. Once referral fees, closing fees, weight handling, storage and returns processing come out, the contribution margin on the same product can differ by twenty percentage points or more between channels. The channel that produces more revenue is frequently not the one producing more profit.

Why the comparison usually goes wrong

Channels get compared on revenue and order volume, because those are the numbers both dashboards show prominently. Neither dashboard shows contribution margin, and neither knows your cost of goods.

The result is a familiar conversation: the marketplace is doing three times the volume, so it must be the priority. That can be true. It can also be true that the marketplace is doing three times the volume at a third of the margin, which changes the conclusion entirely.

What actually comes out of a marketplace sale

None of these appear in your revenue figure. All of them appear in your bank account.

  • Referral fee, which varies by category and is the largest single deduction
  • Closing fee, applied per item and weighted toward lower-value products
  • Weight handling or shipping fee where fulfilment is through the platform
  • Storage fees on slow-moving inventory, which compound quietly
  • Returns processing, which is separate from the lost sale itself

What comes out of an own-store sale

Payment gateway charges, shipping, packaging, and the acquisition cost of the visit, since nobody arrives without being bought or earned. For a store advertising on Meta or Google, acquisition is often the largest single deduction, which is the mirror image of the marketplace picture.

The critical difference is that acquisition cost is a variable you control and improve, while marketplace commission is a rate you are given. A store that improves conversion rate lowers its effective acquisition cost. A seller cannot negotiate a referral fee.

How to model it properly

Take one product and build both columns side by side, all the way down to contribution margin per unit. Do it for a high-volume item and a low-value item, because the closing fee structure hurts cheap products disproportionately.

Then look at what each channel gives you beyond the margin. The marketplace supplies demand you do not have to create. Your own store supplies customer data, repeat purchase and no rule changes imposed from outside. Both are worth something, and neither shows up in a margin calculation.

Key takeaways

  • Compare channels on contribution margin per unit, never on revenue
  • Closing fees hurt low-value products disproportionately
  • Acquisition cost is improvable, marketplace commission is not
FAQ

Questions that follow this one

  • Usually yes, because it supplies demand you do not yet have. Build the own store in parallel rather than after, since moving customers across later is much harder than capturing them from the start.

  • Use the platform's current fee calculator for your specific category and SKU rather than a general figure. Fee structures change and vary considerably by category.

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