What should Mendly take a cut of?
Platform revenue against the money a professional has already spent on parts.
Context
A replacement water heater can cost more than the work to install it. That made me question what Mendly should charge commission on. If a professional buys the heater, taking a percentage of that cost charges them for money they have already spent — before anyone has paid them a cent. Labour is $250, the unit and fittings are $700, and they add $100 of markup for sourcing it and carrying the cost.
What was on the table
Commission on the invoice total.
Maximum revenue per job, and it taxes money that was never the pro's margin. The rational pro response is to hide materials in labour, which destroys the quote data the rest of the product depends on.
Commission on labour only.
Clean, and it gives away the markup — which is real work, since sourcing and fronting cost is a service.
- Chosen
Commission on labour plus markup.
The decision
The fee base is labour plus markup, never raw material cost. On that job: $1,050 before tax, of which the commissionable base is $350. Markup is capped and, above the cap, has to be justified — so excluding materials does not turn into a loophole where everything becomes markup.
The principleDon't take a cut of money that was never profit.
What it cost
Materially less revenue on material-heavy jobs, which is a large share of the categories worth serving. It also makes the quote model harder: materials and markup have to be separable line items, which means pros cannot quote a single number.
Evidence
- The fee base is computed as labour plus markup and nothing else, in one place.
- Markup is capped, requires justification past a threshold, and is unavailable to pros who are not tax-registered.
- A test asserts the fee base and fails if anyone recomputes it against the total.
Enforced in the product code, not only described here.
What would change my mind
If pros systematically inflate markup to convert material margin into something the platform sees as labour, the exclusion stops protecting anything and only costs revenue. The evidence would be markup drifting upward as material cost rises. The fix is a cap that scales with material cost rather than abandoning the principle.