Platforms reduce commission fees in order to support smaller businesses
Trend - Third-party platforms are reducing or eliminating commission fees in an effort to help alleviate the financial burden facing small businesses and entrepreneurs. These initiatives span music platforms, app purchasing platforms, and third-party food delivery platforms.
Insight - It has been well-publicized that many small businesses and entrepreneurs are struggling to turn a profit, specifically those reliant on third-party platforms. Recent controversies have brought to light the near-exploitative ways that several third-party platforms gauge smaller companies. This has prompted consumers to demand that these platforms don't egregiously cut into the profit margins of these at-risk businesses.
Insight - It has been well-publicized that many small businesses and entrepreneurs are struggling to turn a profit, specifically those reliant on third-party platforms. Recent controversies have brought to light the near-exploitative ways that several third-party platforms gauge smaller companies. This has prompted consumers to demand that these platforms don't egregiously cut into the profit margins of these at-risk businesses.
Workshop Question - How can your brand support small or emerging entrepreneurs amid and post COVID-19?
Trend Themes
1. Third-party Platforms Waive Commission Fees - Third-party platforms are taking action and reducing or eliminating commission fees in an effort to alleviate the financial burden affecting small businesses and entrepreneurs. This helps smaller companies get by and encourages consumers to support them.
2. Commission-free Food Delivery - Delivery services, such as Spread, are offering a commission-free business model for local restaurants. This helps restaurant businesses maintain larger profit margins in the face of increasing delivery costs.
3. Lower Commission Fees in App Stores - Apple has reduced App Store commission fees from 30% to 15% for small businesses that make less than $1 million annually. This offers smaller developers in app-based businesses ways to save money and gain more profits.
Industry Implications
1. Third-party Platforms - Third-party food delivery platforms, music platforms, app purchasing platforms.
2. Local Restaurant Food Delivery Startups - Delivery services that partner with restaurants, such as Spread, are supporting the food industry.
3. App-based Businesses - Small developers in many app-based businesses are now saving money and gaining more profits with the reduced commission fees.
