LexiconChannels
Commission headroom
سقف العمولة
Definition
Proposed rule: not yet part of the Doctrine or the Playbook. Wording and formula may change.
Commission headroom is the number of points an order can give a platform before it falls below the group contribution floor: gross margin minus the floor, minus payment and packaging. The order passes when commission, marketing fees, brand-funded discount and refunds stay within it. The gap is the remaining headroom, the first number to read when terms change.
In plain words
How much a platform can take from an order before the order stops being worth it.
Also searched as
- commission ceiling
- maximum sustainable commission
- floor-test headroom
- سقف العمولة
Formula
Commission headroom = GM% − Floor% − p%
Remaining headroom = Commission headroom − (c% + m% + d% + r%)
Variables
- GM%
- gross margin
- Floor%
- group contribution floor, set by the board
- p%
- payment and packaging
- c%, m%, d%, r%
- commission, marketing fees, brand-funded discount, refunds and adjustments
Example
Illustrative example · hypothetical figures
Using the Ledger's example basket: gross margin 65%, floor 25%, payment and packaging 6%, so commission headroom = 65 − 25 − 6 = 34 points. Commission 25, marketing fees 3 and refunds 1 total 29 points, leaving 5 points of remaining headroom.
Where it is used
In the Doctrine and the Playbook
In the Channel Ledger
Related terms
How to cite this definition
Alhajj, S. (2026). “Commission headroom”. In The Revenue Engineering Lexicon, version 1.0. Riyadh. https://seiflden.com/lexicon/commission-headroom/