Platform Fees Squeeze Ridge Margins

This is what turns a strong brand into a toll payer. Ridge can raise prices and cut product costs, but its growth engine still runs through channels that charge for every click, sale, and fulfilled order. When Meta ads get pricier, when Google auctions tighten, or when Amazon adds new seller fees, those increases come out of the same contribution margin Ridge needs to fund more acquisition and category expansion.

• Ridge is unusually explicit that marketing economics drive the business. Meta is its largest paid channel, Google is second, and it built an internal creator team because broad reach is the core workflow. That means customer acquisition is not a side cost, it is the central operating expense that product margins must support.
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• The pressure compounds across channels. Ridge has described Amazon as moving from marketplace growth to fee extraction, and Amazon did add a new low inventory level fee in the U.S. starting April 1, 2024. Even if referral fees stay flat, new fulfillment and compliance fees still raise the all in cost to sell.
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• This is why Ridge targets very high gross margins and higher average order values. Sean Frank has argued that older D2C math no longer works, pointing to much higher click costs over time and the need for sub 20 percent product costs. In plain terms, the wallet has to carry enough markup to feed the ad machine after shipping, payment processing, and platform tolls.
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Going forward, the winners in branded commerce will be the ones that make paid acquisition less necessary per dollar of revenue. For Ridge, that means more repeat purchases from its 5 million plus customer base, more bundles and adjacencies that lift order value, and more demand that comes from brand pull, creators, and retail discovery before platforms can take another cut.