Marketplace Rake Factors

Marketplace Rake Factors

We all know that rake varies greatly in marketplace businesses.  For an overview of some different rakes, check out Bill Gurley’s work here. 

I’ve been thinking about some new businesses that are not yet monetizing and trying to figure out what the potential take rate will be in the future.  In order to do this, I mapped out a variety of factors that determine the rough rake that a marketplace can capture.  The map is far from scientific… it’s based on my observations of well-known marketplace businesses and estimates of the critical factors that drive rake up or down.  Note that these factors are also not mutually exclusive, a platform could have some things driving up the rake and other factors decreasing it.  

The average rake I see in marketplaces is around 20%.  The various factors above can drive it up or down.  For example, let’s look at Ebay.  If you start from 20%, then deduct 5% for transparent fees and 5% more for buyer beware – you arrive at 10%.  Actual rake is about 9%.  However, for categories like cars and trucks, the rake is substantially lower since they are high price items. 

An analysis of Airbnb would be 20% + 5% for insurance + 3% for scheduling - 5% for high price items - 5% for transparent fees and - 10% for users meet in person = 8% total.  Actual is 9-15% depending on overall price. 

iOS would very simply be 20% + 10% for a monopoly platform - 5% for transparent fees = 25% with an actual of 30%.  

Again – these are far from perfect, only to be used as rough guidelines.  Let me know if I missed any critical factors or comment below with your marketplace rake and an analysis based on these factors.  I’d be happy to tune the numbers if I get a lot more data.