🛍️ Otto’s New Tiered Commissions Explained
On October 1, Otto will implement a new tiered commission system. This replaces the flat-rate model, applying different rates depending on the product's price. For example, jewelry priced under €100 will now carry a 22% commission, while items over €200 will have just an 18% rate. This change follows a previous update on August 1, which increased certain category commissions.
📈 Focus on Higher-Value Goods
Otto aims to attract higher-quality products with these changes. "We want to specifically encourage products in the medium and higher price ranges," the company stated. The goal is to make the platform more appealing for expensive goods by reducing commission rates as product prices increase. For instance, clothing over €75 will see a reduced 14% commission.
💸 Higher Fees for Low-Cost Items
The new model increases fees for lower-priced goods, which could strain sellers of affordable items. Clothing under €25 will now have a 17% commission, up from 16%. This might lead to price hikes or reduced profit margins for retailers. The structured commission approach introduces varying rates that could complicate pricing strategies for sellers on Otto.
📅 What’s Next for Retailers?
Otto retailers were notified of these changes this week, with updated terms expected by the end of August. The shift might force some sellers to reconsider their product offerings, particularly those focusing on budget-friendly goods. How the market will adapt remains uncertain, but the push towards higher-value items is clear.
Will Otto’s new commission model impact affordable goods?
