How vendor commission splits actually work

Commission, booth rent, processing fees, and the difference between them — a plain explanation of how multi-vendor shops split revenue.

If you're opening a booth-rental or consignment shop, one of the first real decisions is how you take your cut. There are a few standard models, they behave very differently, and mixing them up causes most of the confusion I see.

Commission

You take a percentage of what sells. A vendor sells $1,000 at a 25% commission, you keep $250, they get $750.

The appeal is that it's aligned — you only earn when they earn. The risk is that a slow booth generates nothing for you while still taking up floor space you're paying rent on.

Typical rates run somewhere between 10% and 40% depending on how much you're doing for the vendor. If you're just providing space, you're at the low end. If you're staffing the register, handling payment processing, marketing, and doing the bookkeeping, you're at the high end and that's defensible.

Booth rent

A flat monthly fee for the space, regardless of sales. Predictable for you, riskier for the vendor. A vendor paying $200/month who sells $150 that month has lost money, and they will remember that.

The hybrid, which is what most shops actually do

Lower booth rent plus a smaller commission. Something like $75/month plus 15%. You get a revenue floor that covers your fixed costs, and vendors get a lower barrier to entry than pure rent.

This is the most common arrangement I see, and it's also the one that's most annoying to calculate by hand, because every payout is two operations instead of one.

Processing fees

Here's the one that causes arguments. If a vendor's $1,000 in sales came through card payments, your processor took roughly 2.6–3% before you ever saw it. On $1,000 that's about $29.

Someone absorbs that. Shops handle it three ways:

• The shop eats it — simplest, and it's baked into your commission rate.
• The vendor pays it — deducted as a separate line on their statement.
• Split it — less common, more explaining.

Any of these is fine. What isn't fine is being vague about it. If your vendor agreement doesn't say who pays processing, you will eventually have a disagreement about roughly $29, and it will cost far more than $29 in goodwill.

Write down the order of operations

This matters more than people expect. Consider a vendor with $1,000 in sales, 20% commission, a $50 booth fee, and 3% processing.

Commission first, then fees:
$1,000 − $200 commission = $800, − $50 booth = $750, − $30 processing = $720

Fees first, then commission:
$1,000 − $50 − $30 = $920, − 20% = $736

Same inputs, $16 apart. Neither is wrong — but if you and your vendor are each assuming a different order, you have a problem. Pick one, put it in the agreement, and be consistent.

Put it on the statement

Whatever you land on, show it as separate lines. "Commission −$200, booth fee −$50, processing −$30" is a document a vendor can check. A single "fees: −$280" is a document a vendor has to trust.

VendNex handles the commission rate per vendor and lets you add named custom fees on top, so each one shows as its own line on the vendor's report — see commission rates and custom fees.