Marketplace vs Website Profitability
Rented Land vs Owned Land. Compare the unit economics of selling on Amazon (High Fees, Low CAC) vs your own Website (Low Fees, High CAC).
Product
Marketplace
Website (DTC)
Unit Profit Comparison
Channel Verdict
Marketplace Wins on Margin
Profit Gap
Difference: $6.00 per unit.
The CAC Factor
Your website CAC ($20) is higher than the combined cost of Amazon Fees + Ads.
Strategic Note
Even if Website profit is lower, owning the customer data (email) may make it more valuable long-term.
Execution Steps
Enter Product Price and Cost.
Input Marketplace costs (Commission %, FBA Fee, PPC Ad Spend).
Input Website costs (Payment Fee %, 3PL Shipping, CPA/CAC).
The chart visualizes the cost stack. See which channel actually puts more money in your pocket.
Pro Strategy
- Don't assume your website is more profitable. If your CAC is >$30, Amazon's 15% fee might actually be cheaper traffic.
- Use Marketplaces for customer acquisition (Volume), and your Website for retention and higher margin sales (LTV).
- Consider creating unique bundles for your website to differentiate it and justify a higher price/margin.
Core Concepts
Rented Land
Marketplaces like Amazon provide the traffic, but charge high 'rent' (fees). You don't own the customer relationship.
Customer Acquisition Cost (CAC)
On your own website, you must pay to bring people there (Ads, SEO). This is often higher than Amazon PPC fees.
Customer Lifetime Value (LTV)
Websites usually have higher LTV because you can email market to customers for free. Marketplaces block this access.
What is Marketplace vs Website Profitability?
This comparative calculator stacks unit costs side-by-side. It highlights the trade-off between Platform Fees (Marketplace Tax) and Marketing Spend (DTC Tax).
Best For
- • Deciding where to launch a new product.
- • Auditing channel profitability.
- • Negotiating with retail partners.
Limitations
- • Static CAC assumption (CAC rises with scale).
- • Ignores organic traffic differences.
Alternative Methods
Channel Waterfall
Visualizes the net price deduction path.
LTV Calculator
Focuses on long-term value of the acquired customer.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Commodity Product
High ad costs on Facebook.
Moved to Amazon.
Beauty Brand
Amazon taking 15% + Ads.
Built community on social media driving to Shopify.