Tanay Jaipuria
Contributor
Tanay Jaipuria is a product manager and angel investor who writes a weekly newsletter on business and technology.
Every marketplace or platform startup has to decide how much they should charge for transactions on their platform, known as the “take rate.”
While there is no formula set in stone, I’ve analyzed the take rates of over 25 private and public marketplaces below. I’ll use these to help shed light on some considerations for founders to guide their decision.
Note that the definition of “take rate” used in this piece will be a percentage, which is calculated by dividing the revenue made on the transaction by the platform by the total value of the transaction.
Maximizing take rate isn’t the goal
It’s important for founders to remember that maximizing the take rate of the platform is not the goal.
A higher take rate typically leads to lower transaction volume, and depending on the stage a company is in, it may be advantageous to charge a lower take rate than what you can sustain to gain a strategic advantage.
Image Credits: Tanay Jaipuria
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