So far in Canada, and in most instances I think, we have used a percentage of turnover ( 1- 3 % it seems) as user fees. In Canada, we have been doing 2% of turnover, but capping it at $150/month. And we only charge in months the enterprise has sales over $500.
Hubs (re-sellers) here have told us that even with the cap, this is not possible for them. Other farm-to-fork platforms here have fees that hover around $80/month for hubs.
We are thinking of going to a flat fee for hubs for a few reasons:
- easy to do - and it can be levied in advance for the year (and the enterprise given a discount for paying in advance)
- with re-sellers, levying a percentage on gross turnovers seems unfair to us. Just to illustrate from a pop up shop I just closed for my farm (selling plants):
- turnover was $40,000 - so if we levied 2%, OFN fees would be $800
But - this is a gross amount. Hubs are tellus that by the time they pay taxes, labour, space rental… that 2% on gross is too high.The 2% on gross can be 20% of their net.
So we are looking for some info from instances using a % of turnover:
- are you taking the percentage on the gross? or on their net?
- why did you decide against a flat fee?
Thanks for any thoughts. We are looking at finalizing a new set of fees in the next few weeks.