Tariffs Just Ate Your Margins - Your eCommerce Platform Shouldn't Be Eating Them Too

The P&L of a UK mid-market retailer right now is a list of things nobody voted for. Employer National Insurance contributions are up. The National Living Wage increased again. The Extended Producer Responsibility packaging levy landed. Shipping costs keep climbing. And layered on top of all of it: tariff-driven increases in the cost of goods for anyone sourcing from Asia, managing US trade exposure, or caught in the crossfire of shifting global trade policy.

The British Retail Consortium has put a number on just part of the burden - an extra £7 billion in costs across the UK retail sector. That figure covers only wages and packaging regulation. It does not include the tariff exposure that is flowing through to COGS right now, nor the broader inflationary environment that is squeezing every line of the trading account simultaneously.

Most UK mid-market retailers are doing what they have to do: raising prices. Two thirds of British retailers say they will increase prices in response to cost pressures. The logic is straightforward - if your input costs rise, you protect margin by passing some of that through to retail pricing.

What fewer retailers are modelling is what that price rise does to their eCommerce platform bill.

The Platform Cost Nobody Is Talking About

If your platform charges a percentage of gross merchandise value - and many of the most widely used platforms in mid-market retail do - then every price increase you make to protect your margin is also increasing the amount you pay your platform vendor.

Not because you're using more of the software. Not because you're getting more value. Simply because GMV, the number the fee is calculated on, has gone up.

This is not a hypothetical scenario. It is the structural reality of how Shopify Plus and Salesforce Commerce Cloud - two of the most common platforms in UK mid-market retail - are priced.

Shopify Plus

operates on a hybrid model. Below a certain monthly GMV threshold, merchants pay a flat monthly fee. Above it - and for a retailer processing more than roughly £800,000 a month, that threshold is well within reach - the fee switches to a percentage of monthly GMV, typically in the range of 0.25% to 0.40% depending on contract term.

Salesforce Commerce Cloud

uses a straight GMV percentage with no flat floor - rates typically sit between 1% and 2% of annual turnover for mid-market retailers, with a first-year total cost of ownership that consultants who track this market report can reach £2.5 million or more against a headline licence that looks far lower.

The mechanism is identical in both cases: a percentage applied to gross revenue. When your revenue rises - for any reason, including price increases driven by external cost pressures - the fee rises proportionally.

The Maths, Made Plain

Consider a mid-market UK fashion brand on Salesforce Commerce Cloud at a 1.5% GMV rate, with £15 million in annual online revenue. Their platform licence costs them £225,000 a year.
Their goods are sourced partly from Asia. Tariff-related cost increases, combined with wage inflation and rising last-mile delivery costs, squeeze the gross margin. The finance team models the options and decides to raise retail prices by 15% - absorbing some of the cost, passing the rest on.
The price rise works. GMV climbs to approximately £17.25 million. But the platform bill is now £258,750.
The retailer has just paid an additional £33,750 to their platform vendor as a direct consequence of protecting their own margin. The platform did nothing differently. It processed the same number of orders, served the same sessions, delivered the same functionality. It simply took its percentage of a higher number.
For a Shopify Plus merchant on variable pricing, the calculation is smaller in percentage terms but the principle is identical. A 15% price rise translates directly into a 15% increase in the platform fee - extracted silently, automatically, and without renegotiation.
This is not how the model is presented in sales conversations. The framing is usually "we win when you win." But when revenue is rising through price inflation rather than genuine volume growth, the platform is winning while the retailer is just running to stand still.

The Double Squeeze

The timing could not be worse. Mid-market DTC brands - those in the broad range of £8 million to £40 million in online revenue - are, according to independent benchmarking of DTC P&Ls, the cohort where margin pressure has been most acute. EBITDA in this segment has dropped sharply as fixed marketing costs have risen while returns on ad spend have softened.

These are businesses with real volume, real brand investment, and real customer relationships - but without the scale of larger retailers to absorb cost shocks, and without the agility of smaller ones to pivot quickly. They are the businesses most likely to be on GMV-based enterprise platforms, and most likely to be raising prices to offset the exact cost pressures that GMV pricing then quietly amplifies.

The compounding effect is what makes this significant. Rising input costs are not arriving alongside a GMV platform fee that is shrinking or staying flat. Both are moving in the same direction at the same time.

The Question Every CFO Should Be Asking

If you are in a contract with a GMV-based platform, one question cuts to the heart of it: "If our prices rise by 15% with flat unit volumes, what happens to our platform bill in the current contract year?"

The answer will tell you whether your platform is priced as a fee for service - charged for the computational and operational resource it provides - or as a participation in your revenue, regardless of whether it contributed to generating it.

GMV-based pricing was designed in an era when revenue growth and commercial progress were assumed to move together. A rising GMV meant more orders, more customers, and more value extracted from the platform. In an inflationary environment - where GMV rises because prices rise, not because business is better - the premise breaks down entirely.

A platform that takes a percentage of gross revenue is not a partner in your growth. It is a creditor with a permanent claim on a share of your trading account, irrespective of conditions.

A Different Model

Remarkable Commerce's monthly licence fee is based on website traffic - specifically, average monthly sessions - not on gross merchandise value. There is no GMV fee, no revenue share, and no commission structure.

What this means in practice: when a Remarkable client raises prices to protect margin, their platform bill does not move. The platform is priced for the resource it delivers - serving the traffic volume that the merchant's site generates. If that traffic stays broadly flat while revenue per session rises due to price increases, the licence fee is unaffected.

As Remarkable's own commercial messaging puts it: "Bespoke costs can stay fixed as your sales increase - which is extra profit on your bottom line and extra return on investment." In a normal trading environment, this is a meaningful advantage. In the current environment - where margins are compressed, input costs are rising, and price increases are a financial necessity rather than a commercial choice - it is the difference between a platform that compounds your cost problem and one that simply does not.

The model also means that genuine growth - new customers, higher order frequency, improved conversion - drops through to the bottom line without any automatic uplift in platform cost. Operating leverage, which GMV-based pricing structurally prevents, becomes real.

Total Cost of Ownership Deserves More Scrutiny

Platform decisions are rarely revisited with the same rigour as the original vendor selection. But the cost of an incorrect platform choice compounds over time - and a GMV-based fee that seemed manageable at £8 million revenue looks very different at £25 million, and different again in a year when prices have risen 15% to offset input cost inflation.

Remarkable's replatforming content frames TCO explicitly across a three-to-five year horizon, and builds costs that qualify as OpEx rather than CapEx - a meaningful consideration for a mid-market CFO managing capital allocation in a constrained environment. The platform comparison guide sets the commercial model directly against Shopify Plus, Salesforce Commerce Cloud, and others for exactly this kind of evaluation.

The question at the centre of that comparison is not just "which platform has the best features?" It is "which platform's cost structure is aligned with how our business actually operates - and how does it behave when the trading environment turns difficult?"

The Margin That Compounds

Tariffs, wage increases, packaging levies, and shipping inflation are external pressures. They are real, they are significant, and they require strategic response. But they are not within the control of a retailer's technology decisions.

Platform pricing is.

A GMV-based fee does not help you when margins are under pressure. It takes a percentage of every price increase you make, regardless of your trading conditions, your volume trends, or your profitability. It is, as one independent analyst has put it, a royalty on your revenue - a turnover rent that the platform collects whether or not the platform contributed to the growth it is being paid for.

If your business is currently raising prices to absorb cost headwinds, and your platform is charging you more as a direct result, the time to model an alternative cost structure is not at the next contract renewal. It is now.