Diversifying Beyond the Rake: How Marketplaces Unlock New Revenue Streams

As a marketplace founder, it's tempting to lean on the trusty platform fee – the commission or "rake" taken from each transaction – as your primary revenue stream. It's straightforward and directly tied to your Gross Merchandise Volume (GMV).

In fact, most marketplaces do exactly this, taking on average 10% to 30% of each sale. But here's the thing: online marketplaces have exploded into a $7 trillion industry by 2024, and with that growth comes fiercer competition and higher expectations for profitability. In my experience advising marketplace operators, relying solely on the rake is a trap that can limit your upside and leave money on the table.

So, how can you break free of the commission-only model without alienating your users? The good news is that the most successful marketplace companies have already paved the way – and it's not by increasing the take rate to infinity (just ask Etsy, which faced a seller backlash after hiking fees from 5% to 6.5%).

Instead, they diversify their revenue streams. From subscriptions and advertising to fulfillment services and fintech add-ons, modern marketplaces are finding creative ways to earn more while also delivering more value to their buyers and sellers.

In this post, I'll share what I've seen working in the marketplace world, breaking down real examples of alternative revenue streams used by both the big players and the up-and-coming startups.

We'll explore concrete tactics – subscriptions, ads, fulfillment, value-added services, data monetization, and more – with a candid look at the pros, cons, and risks of each. By the end, you'll have a clear understanding of how to strengthen your marketplace's business model beyond the basic rake and some ideas to get started. Let's dive in!

The Allure (and Limits) of the Platform Fee

It’s easy to see why the transaction fee (take rate) is the go-to monetization model for marketplaces. You earn money whenever users succeed in trading, aligning your revenue with the platform’s usage. When volumes grow, so do your coffers – simple as that. Most marketplace operators set a take rate in that 10– 30% range, often without exploring alternatives.

However, this over-reliance on a single revenue stream can become a double-edged sword. For one, your income is tied entirely to GMV – any dip in transaction volume (due to seasonality or market downturns) hits your revenue directly. Also, you eventually face a ceiling: there are only so many transactions, and you can only raise your commission percentage so high before users push back.

For example, when Etsy tried to increase its commission by 30%, thousands of sellers went on strike in protest. A high take rate can even drive participants to seek ways off-platform (disintermediation) to save costs, undermining your business.

In short, the platform fee alone can leave you overly exposed and growth-constrained. Marketplaces that only make money from commissions may find it hard to reach profitability without continually squeezing more from transactions – a strategy that can hurt long-term retention. This isn’t to say the take rate model is bad (it's a proven foundation), but it works best when complemented by other monetization strategies.

The Opportunity: Diversify Your Marketplace Revenue

The beauty of running a marketplace is that once you have an engaged network of buyers and sellers, you can build multiple businesses on top of that network. Think about it: you’re already creating value by facilitating trades. What adjacent value or service could you provide that users would pay for? The opportunities are surprisingly rich.

Diversifying revenue is not just about padding your top line – it can also strengthen your platform’s ecosystem. Additional services can improve user experience, increase loyalty, and differentiate your marketplace from competitors. Importantly, new revenue streams can boost profitability without simply jacking up the take rate.

According to Forrester Research, implementing supplementary fees or services can increase revenue by as much as 15–20% when done correctly. And these are often higher margin streams, meaning a larger share of each extra dollar drops to your bottom line.

Of course, every new monetization tactic must be weighed carefully. The best strategies align with your users’ needs and your marketplace’s strengths. Below, I’ll break down a variety of revenue models beyond the standard commission with real-world examples. To make it actionable, I’ve organized the examples by the maturity of the marketplace:

• What the Big Players Do: How large, established marketplaces (Amazon, eBay, Airbnb, Uber, Etsy, Alibaba, etc.) layer on multiple revenue streams.
• How Startups Are Innovating: How newer or niche marketplaces are creatively generating revenue beyond transactions.

For each strategy, we’ll look at what it is, who’s doing it, and the pros and cons to consider.

What the Big Players Do: Monetization Beyond the Rake

Industry giants have been leading the charge in expanding how marketplaces make money. These companies have the scale and resources to experiment, and many of their experiments have paid off enormously. Here’s what some of the most successful marketplaces are doing to monetize beyond just charging a commission:

Subscriptions & Membership Programs

One of the most powerful revenue diversifiers for big players has been subscriptions. By offering premium memberships, these marketplaces secure recurring income and boost user loyalty.

• Amazon Prime: Perhaps the poster child for subscription success, Amazon Prime charges customers an annual or monthly fee for free shipping, media content, and other perks.

This program has over 200 million members worldwide and is a cash machine for Amazon. In 2022 alone, Amazon’s subscription services (primarily Prime) generated over $35 billion in revenue. That’s revenue Amazon collects before a single transaction even takes place. The draw for consumers is clear – pay a flat fee, get premium benefits – and for Amazon, it creates a moat (Prime members stick around and spend more).

• Pros: Predictable recurring revenue and increased customer lifetime value.

• Cons: You must continually invest in benefits to justify the cost; a poorly executed subscription can lead to customer backlash or churn.

• eBay’s Stores Subscription: eBay offers subscription packages for power sellers (e.g. eBay Stores), where, for a monthly fee, sellers get lower per-item fees, higher listing limits, and marketing tools. This is effectively a SaaS-style revenue stream on top of eBay’s commission.

It gives serious sellers a better deal and extra features in exchange for recurring fees. While not as massive as Amazon Prime, it’s a nice addition to eBay’s income.

• Pros: Steady income from your most active users (sellers), who likely are happy to invest if it boosts sales.

• Cons: Only works for a subset of users (your casual sellers won’t subscribe), and you need to deliver value (analytics, tools, discounts) to keep them subscribed.

• Walmart’s Membership (Walmart+): Following Amazon, Walmart’s marketplace offers Walmart+ to consumers – a paid program for free shipping, gas discounts, etc. The goal is similar: increase loyalty and get upfront revenue.

Other marketplaces in travel and food (like Instacart Express, Airbnb’s rumored guest membership program, etc.) have dabbled with subscriptions for users to get better rates or services.

Why subscriptions work for big players: at scale, even a modest monthly fee can translate into billions in revenue. It’s a high margin and deepens engagement. The risk is you must strike the right balance of value; if users don’t feel they’re getting their money’s worth, subscriptions are the first expense they’ll cut.

Established players have an advantage here because they can bundle lots of features and have brand trust to convince users to subscribe.

Advertising & Promoted Listings (Retail Media)

Another lucrative revenue stream the giants have embraced is advertising – essentially turning their platform into an ad channel for sellers or third parties. This includes promoted listings, banner ads, sponsored search results, and more. If done tastefully, it’s a win-win: sellers get more visibility, the marketplace gets paid, and buyers… ideally, still find what they need.

• Amazon’s Advertising Empire: Over the past few years, Amazon quietly built an advertising business so big that it’s now one of the largest digital ad platforms in the world. In 2022, Amazon’s advertising sales hit $37.7 billion (and it’s grown further since). Brands and sellers pay Amazon to display their products prominently in search results and product detail pages.

This “retail media” business has an extremely high margin and is now a core pillar of Amazon’s revenue. By Q4 2024, Amazon’s ad revenue even topped $50 billion annually – an astonishing figure that outpaces the entire global newspaper industry in ad revenue.

• Pros: Advertising is high-margin and scales with traffic, not just transactions. It leverages Amazon’s immense shopper data to target ads effectively.

• Cons: The risk is cluttering the user experience with too many sponsored results or irrelevant ads, which can erode customer trust over time. Amazon must balance monetization with maintaining a useful search experience.

• eBay’s Promoted Listings: eBay has also struck gold with advertising on its platform. In Q2 2023, eBay’s first-party advertising (Promoted Listings and display ads) brought in $367 million for the quarter, about a 35% YoY increase – on track for well over a billion dollars a year. Sellers can pay to have their listings show up higher in search or in ad placements.

Notably, in eBay’s 2023 results, over 2% of all GMV was earned back as advertising revenue, showing how significant this has become.

• Pros: As with Amazon, this is high-margin revenue that effectively “taxes” the desire for more sales – top sellers are willing to spend on ads to boost sales, and eBay benefits.
• Cons: Smaller sellers might feel pressured or disadvantaged if ads dominate search results.

Also, an over-reliance on ad revenue could tempt eBay to prioritize ad revenue over the quality of the buyer’s search experience.

• Etsy’s Ads and Offsite Ads: Etsy, known for handmade goods, has grown its seller services, including advertising. Etsy allows sellers to pay for Etsy Ads (on-platform promotion) and also charges sellers an additional fee for Offsite Ads (when Etsy advertises listings on Google/Facebook and a sale results). This has significantly boosted Etsy’s revenue.

From 2021 to 2024, Etsy’s services revenue (which includes ad fees) jumped from about $583 million to $787.6 million. By 2024, nearly 28% of Etsy’s total revenue came from these seller services (ads, payment processing, etc.), acting as a buffer against slower growth in core transaction volume.

• Pros: Even mid-sized marketplaces can leverage ads for extra revenue, especially if their niche has active sellers looking to stand out. It’s incremental income on top of transaction fees.

• Cons: Again, moderation is key – Etsy has to be careful that the push for ad revenue doesn’t exploit sellers or overwhelm buyers. There have been grumbles from Etsy sellers about ad fees cutting into their already thin margins.

• Uber’s In-App Ads: This is outside of e-commerce, but it is worth noting how the marketplace concept in other industries is also diversifying. Uber – essentially a marketplace for rides and food delivery – launched an ads division in 2022 to monetize its app real estate.

Think car-top billboard ads, sponsored listings in the Uber Eats app, and even ads on the in-car tablet in some Uber rides. In just two years, Uber’s ad business reached a $1 billion annual revenue run rate (hitting the goal right on schedule). That’s a brand-new revenue stream on top of Uber’s ride and delivery commissions.

• Pros: Makes use of existing assets (the app, the cars) to earn extra cash, very high margin.
• Cons: For riders and eaters, this is purely additional advertising noise – Uber must ensure it’s not too intrusive (nobody wants a spammy ride experience) and that it doesn’t distract from the core utility of the app.

The bottom line on ads: Advertising and promoted listings have become a staple revenue source for large marketplaces, often rivalling or surpassing the core commission revenue. The retail media boom is no accident – marketplaces sit on a goldmine of purchase intent data and captive audiences, which advertisers love.

The caution is to implement ads in a way that adds value (or at least doesn’t annoy users). When done right, it’s a powerful engine for growth: high-margin, scalable, and synergistic with your core platform (more ad revenue can be reinvested into improving the marketplace).

Fulfillment & Logistics Services

Physical product marketplaces (especially at scale) have learned that there’s money to be made not just in facilitating sales but in fulfilling them. By offering logistics services – like warehousing, packing, and shipping – marketplaces both improve the customer experience and create a new profit center through fees for these services.

• Amazon’s Fulfillment by Amazon (FBA): Amazon not only charges sellers a commission but also offers them FBA, which is when Amazon stores the seller’s inventory in its warehouses and handles packing/shipping to customers. Sellers pay warehousing fees and fulfillment fees for this convenience. This has been huge for Amazon.

In fact, Amazon’s revenue from third-party seller services (which includes FBA fees, storage, and commissions) was about $117 billion in 2022, dwarfing even its first-party retail sales. FBA fees are a big part of that. Sellers gladly pay because FBA makes their products Prime-eligible (faster shipping = more sales).

• Pros: Fulfillment services generate revenue per item sold (beyond the commission) and tend to be sticky – once a seller sends inventory to Amazon’s warehouses, they are deeply integrated with the platform. It also ensures customers get fast, reliable delivery, which increases trust and sales (a virtuous cycle).

• Cons: Running fulfillment is capital- and labour-intensive. Amazon spent decades and tens of billions building its logistics network – not every marketplace can stomach that. Operationally, it’s complex: you’re now in the world of warehouses, inventory management, and shipping carriers. Mistakes here (lost or damaged items, shipping delays) directly impact your brand.

So, the bar to do this profitably is high, and margins can be thinner than pure digital revenue streams.

• Walmart Fulfillment Services (WFS): Following Amazon, Walmart’s marketplace offers WFS to its third-party sellers, providing storage and shipping for a fee. It’s a similar model: leverage Walmart’s distribution network to earn service fees and improve the shopper experience with 2-day shipping.

For Walmart, this not only brings extra fees but also helps them compete with Amazon in terms of logistics speed.

• Etsy and Others (Facilitated Shipping): Smaller marketplaces typically won’t run their own warehouses, but they still can dip into logistics revenue in lighter ways. Etsy, for example, doesn’t warehouse goods, but it does offer sellers the ability to buy discounted shipping labels via Etsy.

When sellers do that, Etsy likely earns a tiny margin on each label (by negotiating bulk rates with USPS/ FedEx and pocketing the difference). Similarly, many marketplace platforms partner with shipping or fulfillment companies and get referral fees or small cuts of shipping transactions.

Some niche marketplaces might set up a 3PL (third-party logistics) partnership: for instance, a fashion marketplace could partner with a fulfillment center that offers sellers storage and shipping – the marketplace takes a referral commission or a slice of those fees.

• Pros: Even without building warehouses, facilitating shipping can provide a bit of revenue and, more importantly, ensure your sellers ship efficiently (leading to happy buyers).

• Cons: The revenue here is relatively small per transaction, and customer support overhead might increase (shipping issues can create headaches). Marketplaces have to decide if the incremental revenue is worth the complexity.

In summary, fulfillment services can be a lucrative extension for marketplaces dealing in physical goods at scale. It turns a cost center (shipping) into a profit center. But it’s not a trivial endeavour – it requires significant investment and operational excellence. Big players like Amazon have proven they can pay off by boosting both revenue and the overall health of the marketplace (faster shipping drives more usage).

Payments, Fintech & Value-Added Services

Payments and financial services are another gold mine that large marketplaces increasingly tap into. Since the marketplace already sits between buyer and seller in the transaction flow, it’s natural to monetize the payment processing and financial side of transactions.

Beyond payments, marketplaces are offering related services like insurance, financing, and warranties – either building their own or partnering – to take a cut of those deals.

• Payment Processing Fees: Every online transaction incurs payment processing costs (to Stripe, PayPal, credit card companies, etc.). Big marketplaces have started to bring payment processing in-house or negotiate special rates, essentially becoming their own mini-PayPal.

For example, eBay transitioned from using PayPal to managing payments itself (via Adyen as a backend). Now, eBay charges sellers a payment processing fee on top of the selling fee. While a portion of that fee goes to the payment processor, eBay likely marks it up slightly to earn a profit. This shows in eBay’s financial results as well: their "managed payments" initiative not only streamlined user experience but also added to their revenue per transaction. Etsy similarly charges a payment processing fee for Etsy Payments and likely earns a margin on it.

• Pros: It’s a revenue stream that’s practically hidden – sellers often treat it as a cost of doing business. If you can process $1 billion in payments and shave even 0.5% as revenue, that’s $5 million in your pocket. Additionally, owning the payment flow gives you more control over the user experience and cash flow (holding funds, etc).

• Cons: Payments come with complexity, including compliance (KYC, anti-fraud, security) and regulatory requirements. You also bear the risk of chargebacks and fraud. So, you either build a big payments team or partner closely with a payment provider; the margins might be modest after covering risk and processing costs. Yet, for large volumes, it adds up.

• Financing and “Buy Now, Pay Later” (BNPL): Some marketplaces have introduced financing options at checkout (for buyers) or even loans for sellers. Offering installment plans or BNPL (often via partners like Affirm, Klarna, or Afterpay) can boost sales conversion (good for GMV) and often, the marketplace can take an affiliate fee or revenue share from the BNPL provider.

For example, if your marketplace sells higher-ticket items, integrating financing not only helps customers afford more, but you might get a few percentage points of the financed amount as a commission from the lender. On the seller side, Amazon has offered loans to sellers for inventory; Shopify (though more e-commerce than marketplace) also provides merchant cash advances, which generate interest income.

• Pros: These services address user needs (affordability, liquidity) and make your platform more than just a listing site – you become a business partner to users. They can drive more transactions (buyers spend more when they can pay in installments), which indirectly boosts commission revenue, too.

• Cons: Credit risk is a major factor – most marketplaces mitigate it by partnering with financial institutions who assume the risk (for a cut of the profit). So, the revenue share might not be huge, but it’s almost free money if it is integrated well. Also, you need to integrate seamlessly so that the financing option doesn’t add friction to the checkout process.

• Insurance and Protection Plans: Marketplaces that deal in goods or services often have opportunities to offer insurance or guarantees for an extra fee. For instance, Airbnb offers travel insurance to guests and damage protection insurance to hosts; StubHub (ticket marketplace) offers ticket purchase protection; Etsy has started offering purchase protection programs (some are free, but one could envision paid extensions).

Even Uber and Lyft tack on small insurance fees for each ride to cover accidents (sometimes this is built into the fare – effectively a pass-through to insurance,But one could see future models where riders opt into extra coverage for a fee). According to industry studies, adding insurance or warranties as an optional upsell can meaningfully boost revenue. One study noted that add-on insurance sales can boost revenues by up to 25% for the platform offering them.

• Pros: Typically high-margin if you get a revenue share from the insurance provider; also boosts trust (users feel safer using the platform with a safety net). It’s an ancillary service that can add significant ARPU (average revenue per user) without affecting the core transaction.

• Cons: Take care that the insurance offering is clear and valuable – you don’t want users feeling nickeled-and-dimed by junk fees. Additionally, any time an insurance claim is denied or a customer has issues, it can reflect poorly on the marketplace, even if a third-party underwriter is the one servicing it. So, the quality of partners and coverage matters.

• Value-Added Tools and Services for Sellers: Large marketplaces sometimes offer premium tools for an extra fee. For example, Alibaba (on its B2B platform) has paid Gold Supplier memberships, which give suppliers extra credibility and features; Amazon offers analytics tools and keyword ads (free and paid) to sellers; some job/freelance marketplaces charge for “featured” profile status or extra bids (think of how freelancing sites sell “connects” or bid credits).

These are essentially value-added services that go beyond basic buying/selling. Alibaba’s model is instructive: Alibaba generates revenue not just from commissions but also from online marketing services and membership fees for sellers, plus other value-adds. By offering data analytics, enhanced listings, or storefront customization for a fee, they tap into vendors’ marketing budgets rather than just taking a cut of sales.

• Pros: These services monetize the platform itself as a product (almost like a SaaS offering layered on the marketplace). They can foster more professionalism on the platform (serious sellers invest in tools to grow, which in turn brings better selection or quality for buyers). And, of course, it’s extra revenue with relatively low marginal cost (e.g. selling access to a premium analytics dashboard you built once).

• Cons: If the core marketplace experience for sellers is too bare-bones and everything useful sits behind a paywall, you may deter new or smaller sellers. You have to balance free vs paid features carefully. Also, offering these services can shift your focus – you now have to support software products and customer service for those products, which is a different beast than running a marketplace.

In summary, financial and value-added services are where many big marketplaces are turning into full-fledged platforms or ecosystems. By capturing payment fees, offering insurance, facilitating loans, or selling premium tools, marketplaces deepen their relationship with users and open new income streams.

The upside is huge – some of these streams can rival core revenue – but each comes with operational considerations. Done well, they not only add revenue but also enhance the core value proposition of the marketplace (e.g., safer transactions, more sales for sellers, etc.). The key is ensuring these add-ons truly add value, not just revenue.

Data Monetization and Partnerships

The largest marketplaces sit on mountains of data about consumer behaviour, pricing trends, and supply/ demand dynamics. While data monetization is a newer and more sensitive area (given privacy concerns), it’s worth mentioning how big players leverage their data, sometimes indirectly, for revenue or strategic advantage.

• Advertising Targeting & Brand Insights: One could argue the real product Amazon sells in its advertising business is data – advertisers pay for access to Amazon’s audiences and shopping insights. Amazon, eBay, and others use their data to help sellers target ads effectively, which in turn makes the advertising products more lucrative (and expensive).

Additionally, marketplaces can produce aggregate reports – e.g., trend reports and market research – that brands might pay for. For instance, a fashion resale marketplace could anonymize and sell data about trending brands or styles to fashion labels to inform their design and inventory decisions. This isn’t widely publicized, but it’s an area of opportunity as marketplaces grow.

• Pros: Data is a byproduct of your operations, so monetizing it can be high-margin. It can often be done in aggregate to avoid privacy issues (selling insights rather than personal data).

• Cons: This area is rife with ethical and legal pitfalls. User privacy must never be compromised – trust is paramount in a marketplace. Additionally, selling data or insights might put you at odds with your users if not done carefully (e.g., sellers might not love the idea of you selling trend data to their competitors unless it’s public info).

• Strategic Partnerships & Affiliate Revenue: Big marketplaces sometimes ink deals that generate side revenue. For example, a marketplace might partner with a credit card company for referrals (earning a bounty for each user who signs up for a co-branded credit card) or with a shipping company for referrals (earning a commission if a seller uses a particular shipping service).

Amazon has a host of partnerships (from Amazon Hub lockers with retailers to affiliate programs) that indirectly bring in revenue or offset costs. Another example is travel marketplaces like Booking.com or Expedia cross-sell travel insurance or local tours (via partners) for a cut. While these are not always huge money-makers, they illustrate the many avenues large platforms explore.

• Pros: Low effort – partner does the heavy lifting, marketplace just integrates or promotes and collects a check. It also broadens the services available to your users (one-stop-shop convenience).

• Cons: Not every partnership pays off, and if users feel bombarded with cross-selling (e.g., “add a car rental with Avis!” on every booking flow), it can hurt the user experience.

In essence, the big players operate on a philosophy of being comprehensive ecosystems. They want multiple bites of the apple: if a transaction is happening (or even if one might happen), how can they monetize different facets of it? The commission is one bite, ads are another, payments are another, shipping is another, subscriptions are another, data is another, and so on.

This strategy has allowed companies like Amazon, Alibaba, and eBay to achieve enviable profit margins and resilience. If one revenue stream faces headwinds (say, ad spend dips in a recession), others (like subscription renewals or take rate from higher GMV) can balance it out. It’s a diversified portfolio approach that can be applied to a single platform.