Hi, We will be developing an online e-commerce platform for buyers and sellers to transact. We will charge a fixed % of platform commission for the usage of platform. Payment gateway merchant will collect the amount paid by buyer which consist of seller's cost of item, shipping fee and platform fee. Upon remittance to us, payment merchant will charge a processing fee. Item cost: 30,000 Shipping : 600 Platform commission: 2,142 Payment gateway fee: 655 Total: 33,397 Can I check on the following? 1. How do I issue an invoice to the customer when a transaction is approved? 2. Do I request an invoice from the seller so that I can remit the item cost and shipping fee to them? Quite confuse with the double entries too. Thanks.
E-commerce platform
Answers
There is one place where still a clarity is required? Are you going to act as a reseller or just a broker?
If you are acting as a reseller, you will raise invoice to customer and seller will raise an invoice to you.
If you are acting as a broker, seller will raise the invoice.
in either cases consider following scenarios before you make a decision. This is a long thought process before you make it final.
- What is the price is being displayed on your ecommerce platform? will the item be posted at $30,000 or $33,397
- Is customer aware about your fees? or is it just the vendor? who is paying platform fee? customer or seller?
- payment gateway fees is part of your cost? you should not include that in your billing on ecommerce platform, unless specified in agreement between seller and you!
There are many such scenarios need to be considered!
From your question, what I understand is that you act as an intermediary by providing the e-commerce platform for the two parties to trade.
The invoice ought to be requested from the seller which includes your platform commission as well. When you collect this payment from the merchant, you could keep your percentage of commission and revert the remaining to the seller.
These should be agreed upon by the relevant parties, the sellers plus your merchant. You must also decide how you wish to display prices and fees to the customers on the invoices.
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