ClearFeeMath field note · 5 min
Percentage fees vs fixed fees
Two platforms can advertise similar rates and still produce very different payouts. The difference often comes from how fixed and percentage fees interact with transaction size.
Percentage fees scale with revenue
A percentage fee grows in direct proportion to the sale. Ten percent costs $1 on a $10 sale and $100 on a $1,000 sale. It stays predictable, but becomes expensive as revenue grows.
Fixed fees punish small transactions
A 30-cent fixed charge equals 6% of a $5 sale, 0.3% of a $100 sale, and 0.03% of a $1,000 sale. This is why microtransactions and low-priced downloads often need bundling.
Compare effective rates
Divide all fees by gross revenue to find the effective rate. This creates a common measure for platforms with different fee structures and reveals when a monthly subscription becomes economical.
Common questions
Which is better: a percentage fee or fixed fee?
Neither is universally better. Fixed fees favor larger transactions; percentage fees can favor smaller transactions when the fixed alternative is high.
What is an effective fee rate?
It is total fees divided by gross revenue, expressed as a percentage.