Let's dive into the three main business models that marketplaces employ: commissions, subscription fees and listing fees 🌟

1️⃣ The most common business model for marketplaces is commissions, which is when a marketplace takes a slice of each sale on its platform.

This aligns the marketplace’s success with that of its sellers – they make more money when their sellers make more money 🛒

eBay, Uber and Airbnb all make the majority of their revenue through commissions.

2️⃣ Marketplaces may also charge buyers or sellers a subscription fee to use their platform, or for premium benefits 💎

This can offer marketplaces a more stable, predictable revenue stream compared to commissions, which can fluctuate with supply and demand.

Amazon Prime is a great example of this model, offering customers benefits like free shipping for a yearly subscription fee 📦

3️⃣ Some marketplaces charge sellers a fee for posting their products or services, known as a listing fee.

For example, Etsy charges sellers $0.20 per item they post 👚

Many marketplaces combine multiple business models together.

In addition to its $0.20 listing fee, Etsy also charges a 6.5% commission on each sale.