In plain words
Take rate is the share of an offer's buyers who pick one option over the others. If 100 people buy and 40 choose the bundle, the bundle's take rate is 40%.
It is the weight on each option's margin. An offer's average margin per order is each option's margin times its take rate, added up. Moving buyers from a thin option to a rich one raises the offer's profit without a single extra visitor buying.
Formula
- Take rate of an option = orders of that option ÷ all orders of the offer
- Blended margin per order = Σ (option margin × its take rate)
Worked example
Of 32 buyers, 20 take the single bag and 12 the three-bag bundle: a bundle take rate of 37.5%. The single keeps 38.4% of its revenue and the bundle 47.1%.
For the offer's blended margin to reach 45.0%, the engine's solver puts the bundle's take rate at 55.0%, with the single bag's share shrinking to make room.
The example order
A $40.00 bag of coffee, shipped free, every cost counted
2 declared kinds cost nothing on this option
| Step | Grain | Amount |
|---|---|---|
| Revenue | – | $40.00 |
| Cost of goods | per unit | −$12.00 |
| Pick and pack | per order | −$1.18 |
| Packaging | per parcel | −$0.50 |
| Shipping label | per parcel | −$7.50 |
| Card fee per order | per order | −$0.30 |
| Refunds | percent | −$2.00 |
| Card processing | percent | −$1.16 |
| Contribution margin | – | $15.36 |
| 2 kinds costing nothing | – | $0.00 |
Computed by the margin engine in Offer Suite's own code, in whole cents, from a $40.00 bag of coffee with a $12.00 unit cost.
Take rate is not conversion rate
Conversion is buyers over visitors. Take rate is one option's buyers over all buyers. An offer can keep the same conversion while its take rates shift completely, and its profit will move with them.
Using it
Watch take rates whenever you change how options are presented: the order they are listed in, which one is preselected, how the saving is worded. These changes often move buyers between options more than they move the number of buyers. A default set on the richest option is usually worth testing.
In Offer Suite
Offer Suite's simulator weighs each option by its observed purchases over the offer's visitors, and can solve for the share one option needs for the blended first-order margin to reach a target.
Source: Offer Suite's offer simulator.