Agency margin maths: the wholesale fee, your price and what you keep

On a white-label ecommerce platform your margin is simple to state and easy to get wrong: your price minus the wholesale fee, store by store, minus the time you spend. Here is the maths, with worked examples.

Every white-label platform comes down to one sum: what your client pays you, minus what you pay the platform. The sum is easy. The mistakes come from what it leaves out: your team’s time, discounts, the mix of plans and the number of stores. This article works through each, with example figures you can replace with your own.

It is part of our series on earning monthly from client stores; the overview is how to charge clients monthly for an online store. All amounts are examples without a currency, not DripFunnel prices or fees.

What is the margin on a white-label store?

On a white-label ecommerce platform you pay a wholesale fee for each client store, and you charge the client your own price for the plan. The difference is what you keep:

What you keep per store per month = your monthly price − the wholesale fee for that plan.

The margin percentage is what you keep divided by your price. In the example, Grow keeps 54 of 79, which is 68%.

What do you keep after your own time?

The table above is the headline. Your real profit per store also pays for the time your team spends on it: answering questions, small changes, the monthly check-in. Put a cost on an hour of that time (salary and overheads divided by working hours) and subtract it.

This is where small plans go wrong. A Start client who emails every week can cost more in time than you keep. Two fixes work: limit the support included in small plans (email only, a response within two working days), and give clients good help pages so they find answers themselves.

How much do you earn across all your stores?

Your business runs on the total, so multiply by the number of stores on each plan. An example agency with 50 stores:

Two things stand out. First, the 5 Scale stores keep nearly three-quarters as much as the 30 Start stores (520 against 720), with a sixth of the clients to look after. Second, moving one store from Start to Grow adds 30 a month to what you keep, which is why spotting stores that are outgrowing their plan matters. Over a year this example keeps 24,600 before the cost of your team.

How many stores do you need to break even?

Divide your fixed monthly costs by the average you keep per store. In the example, the average is 2,050 ÷ 50 = 41. If a part-time support person costs an example 1,500 a month, you need about 37 stores (1,500 ÷ 41) before that role pays for itself. Every store after that adds to profit.

What happens to your margin when you change prices?

The wholesale fee doesn’t move when your price does, so price changes hit what you keep harder than they look:

• A price rise: Grow from 79 to 89 is a 13% rise for the client, but what you keep goes from 54 to 64, an 18.5% rise for you.
• A yearly discount: Grow at 790 a year instead of 12 × 79 = 948 saves the client 158. If the fee is still 25 per store per month (300 a year), you keep 490 instead of 648: the whole 158 comes out of your share, 24% less than monthly. Check how your contract treats yearly plans before you set the discount.
• A discount to win a client: 10 off Grow for a year costs you 120 of the 648 you would have kept, about 19%.

Yearly plans are still often worth it, because a client who pays for a year is a client you don’t have to win again for twelve months. Just price the discount knowingly. More on keeping clients in how to keep clients on monthly store plans.

Why a fee per store is easier to plan than a fee per order

Some ways of offering shops charge by the order or take a share of revenue, so your costs, or your income, rise and fall with your clients’ sales. A fixed fee per store per month means you know your cost for each store before the month starts, and your client’s busy season doesn’t eat into your margin. If you’re comparing with the main alternative for agencies, read Shopify Partner Program vs a white-label platform: what agencies earn and own and what agencies should explain to clients about Shopify transaction fees.

How DripFunnel shows your margin

In DripFunnel’s white-label partner programme, used by more than 75 partners across the globe, your contract sets a wholesale fee per store per month for each plan. In the partner console:

• Every price shows what you keep. Next to each monthly and yearly price, the plan editor shows DripFunnel’s fee for that plan and what you keep, for example “You keep $30 of $49”.
• You can’t sell at a loss by mistake. A price below the fee shows a warning and the plan can’t be saved that way.
• Each currency has its own price. You set prices in every currency your contract covers, and they aren’t converted from one another, so you choose the margin in each market (Create your plans).
• Your finance person can manage prices. The Finance role can change prices without touching the rest of a plan (Your partner team).
• Upgrades are one action. Change a store’s plan, or add a limit override for one store without changing its plan (Create and manage stores).
• Reports add it up. The revenue report shows monthly recurring revenue by plan, with a spreadsheet export.

DripFunnel takes no fee on your clients’ orders, so their sales don’t change your cost. For the pricing side of the same sum, see ecommerce website pricing for agencies: a set-up fee plus a monthly plan, and for packaging plans, how agencies can sell online stores as a monthly service. Over time, these margins are also what make your agency worth more: see why monthly store revenue makes your agency worth more.

New to the model? Read what white-label ecommerce is and how agencies use it. Want to see your own numbers? Talk to us about the partner programme and we’ll go through the fee for each plan with you.

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