Paying a turnover fee for automation is not fair

Bart Vintcent
CEO | Bart, ooit programmeur, is een van de co-founders van EffectConnect.
18 March 2021

There are multiple marketplace integrators in Europe who charge a fee based on their customers’ turnover. This business model is under pressure, seeing the enormous increase in turnover that is generated on marketplaces. This model causes cost for automation to increase as turnover increases, while the service of automation does not alter. Times have changed, but our vision has not.

Back in the days, when marketplace managers did not exist

A few years ago, marketplaces were still new and unknown. Let alone the non-existence of knowledge within the organisation about these platforms and how to handle these. Marketplaces often  were a side activity of the marketing manager or e-commerce manager. 

In those bygone times, a few marketplace integrators emerged, supporting organisations in their marketplace sales. They delivered automation and to a certain extent also operational and strategic support as brands did not have this knowledge in-house. 

This support comes at a cost. These parties charge a percentage based on the marketplace turnover that is generated. This is interesting when you have a small turnover, but as growth is realized, costs for integration start to rise fast.

Times have changed, marketplaces are in the mix

Meanwhile we arrived in 2021 and marketplaces are well established. They belong to a brand’s marketing mix and this is serious business for these companies. Job vacancies such as “marketplace manager” and “Amazon specialist” have increased quickly over the past two years. Or in other words: the additional services that these before mentioned integrators offer are now carried out by your own employees. Just like SEO, SEA and other “new” online phenomena over the past years. This places the integrator back in its automation role: the role as we at EffectConnect feel it should be since we were founded.

“The role of the marketplace integrator changed. Brands now hire marketplace managers who are in charge of operations and strategy. The marketplace integrator should provide robust automation and support. Turnover related fees should not be part of that.“
Bart Vintcent, CEO EffectConnect

Paying a turnover fee for automation is not fair

This changing role also emphasizes that this turnover fee business model is not fair anymore. After all: automation is provided. Strategy and operations is part of your business, or is supported by a great agency who excel in this, such as our partners Merkle, MvH Media and Brightways. 

Anyway, being an automator does not mean we do not provide any advice or prevent you from pitfalls. We feel this is part of our job and since we handled over thousands of integrations, we know what to pay attention to!

But this turnover fee. It is simply not fair. Why should you pay more for a 300 Euro order compared to a 30 Euro order? The process is the same. The platform does not have to do anything different. Why should you pay more? We at EffectConnect do not believe in this business model. It is not fair. That is why we created a proposition which fits seamlessly into the vision we already carry out for years.

Enterprise in EffectConnect is called Scale

Enterprise: what does this mean? When is a company classified as “Enterprise”? With a 10 million Euro turnover? Or 50 million? Or 100 million? Or should you have more than 250 employees? The term is empty.

That is why we introduce Scale at EffectConnect. A proposition for marketplace sellers (brands, wholesalers or online retailers) who have an ambitious growth plan and need robust automation and support to assist this growth. The term “Scale” already explains what it means: up-scaling. Grow.

When a company is upscaling, its needs change. What suffices today, is insufficient tomorrow. And it changes month by month. We have learned this over the years. As we have seen so many situations where companies grew exponentially, we know how to offer a flexible solution that constantly fits your needs with our Scale proposition. This puts automation in function of selling and prevents having to put a strain on growth. And we do this, opposite to most of the European integrators, without charging a turnover fee!

So, does this make you think? Do you also feel that paying for automation based on a turnover fee is not fair and would you like to discuss this with our CEO Bart Vintcent?

Contact us