How Commission System Works in Dokan (Complete Guide with Examples)

The commission system is the financial backbone of any multi-vendor marketplace.
If your commission logic is unclear or poorly configured, you risk vendor disputes, revenue loss, and scaling problems.

If you’re building a marketplace using Dokan, this guide will explain exactly how Dokan’s commission system works, what options you have, and how to customize it for real business models.

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🔴 Why Commission Setup Is Critical in Dokan

Your commission system determines:

• How much you earn per sale

• How much vendors receive

• Vendor motivation & retention

• Long-term marketplace sustainability

A wrong setup can lead to:

• Vendor complaints

• Payment confusion

• Accounting issues

• Revenue leakage

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🧠 Dokan Commission System – Big Picture

A Dokan marketplace is built on three layers:

1️⃣ WordPress
2️⃣ WooCommerce
3️⃣ Dokan (vendor & commission logic)

Dokan does not replace WooCommerce payments — it simply splits revenue based on your rules.

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💰 How Dokan Commission Works (Basic Flow)

Here’s what happens when a customer places an order:

1️⃣ Customer places an order
2️⃣ Payment goes through WooCommerce
3️⃣ Dokan calculates commission
4️⃣ Vendor earning is recorded
5️⃣ Admin commission is recorded
6️⃣ Vendor withdraws earnings later

👉 Dokan does not automatically pay vendors unless withdrawal rules are met.

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1️⃣ Global Commission (Default Dokan Setup)

✅ What It Is

A single commission rule applied to all vendors and products.

Example

• Commission: 10%

• Product price: ₹1,000

• Admin earns: ₹100

• Vendor earns: ₹900

Where to Set

Dokan → Settings → Selling Options

👉 Best for simple marketplaces or early-stage platforms.

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2️⃣ Category-Based Commission (Advanced Use Case)

✅ What It Is

Different commission rates for different product categories.

Example

• Electronics → 12%

• Fashion → 8%

• Digital Products → 5%

Why It’s Powerful

• High-margin categories earn you more

• Competitive categories attract vendors

👉 Ideal for large marketplaces with multiple niches.

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3️⃣ Vendor-Specific Commission

✅ What It Is

Custom commission for individual vendors.

Example

• New vendors → 15%

• Verified vendors → 8%

• Premium vendors → 5%

Business Advantage

• Reward top-performing vendors

• Encourage upgrades or subscriptions

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4️⃣ Fixed Commission vs Percentage Commission

🔹 Percentage-Based

• Best for variable pricing

• Scales automatically

Example:

• 10% of ₹2,000 = ₹200

🔹 Fixed Commission

• Flat fee per order

Example:

• ₹50 per order (regardless of price)

👉 Many marketplaces use both together (fixed + percentage).

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5️⃣ Combining Fixed + Percentage Commission (Best Practice)

Example Setup

• Fixed: ₹30

• Percentage: 5%

Order price: ₹1,000

• Commission = ₹30 + ₹50 = ₹80

• Vendor earns ₹920

This model:
✔ Covers platform costs
✔ Scales with order value

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6️⃣ Commission on Shipping & Tax (Important Detail)

By default:

• Commission applies only to product price

• Shipping & tax usually go to vendor

But with customization, you can:

• Take commission on shipping

• Take commission on tax

• Exclude or include fees selectively

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7️⃣ How Vendor Earnings & Withdrawals Work

Dokan stores vendor earnings internally.

Vendors can withdraw using:

• Bank transfer

• PayPal

• Stripe

• Other enabled methods

Admin controls:

• Minimum withdrawal amount

• Withdrawal schedule

• Approval rules

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⚠️ Limitations of Default Dokan Commission System

Out-of-the-box Dokan cannot handle:

• Performance-based commission

• Time-based commission

• Subscription-based commission logic

• Commission by order quantity

• Complex multi-vendor split rules

This is where custom development becomes necessary.

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🛠️ Custom Commission Logic (Real Business Scenarios)

Custom development allows:

• Higher commission for new vendors (first 30 days)

• Lower commission after X sales

• Category + vendor hybrid rules

• Service-based commission models

• Commission by delivery method

👉 Almost all successful marketplaces use custom commission logic.

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📊 Which Commission Model Is Best?

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📚 Also Read

• Dokan Pricing Explained – Hidden Costs You Should Know
• Dokan Free vs Pro – Which One Should You Use?