how-much-does-ebay-take

How Much Does eBay Take?

Business / By / August 25, 2023

In 2022, eBay’s take rate was 13.25%. It means that eBay takes a cut of over 13% for each transaction through the platform. For instance, in 2022, on a total of almost $74 billion in gross merchandise value on top of the forum, the company generated nearly $9.8 billion.

Key Highlights

  • Take Rate Explanation: eBay’s take rate refers to the percentage of the transaction value that eBay retains as revenue for facilitating transactions on its platform. A take rate of 13.25% implies that for every $100 worth of goods sold on eBay, the company would retain $13.25 as its fee.
  • Gross Merchandise Value (GMV): GMV represents the total value of all goods sold on eBay’s platform during a specific period, regardless of whether the transactions were completed or not. In 2022, eBay’s platform saw transactions with a collective GMV of almost $74 billion. This emphasizes the immense volume of commercial activity that occurs on eBay.
  • Revenue Generation Breakdown: With the 13.25% take rate applied to the $74 billion GMV, eBay generated nearly $9.8 billion in revenue during 2022. This revenue includes the fees collected from sellers on the platform for enabling their transactions.
  • Platform Facilitation: eBay provides a platform that connects buyers and sellers from around the world, enabling them to engage in e-commerce transactions. The company offers tools and services to facilitate these transactions, including listing items, managing payments, and ensuring a secure environment for buyers and sellers.
  • Seller Diversity: eBay’s platform hosts a wide range of sellers, including individuals, small businesses, and larger retailers. This diverse seller base contributes to the variety of products available on the platform and attracts a broad range of buyers.
  • Global Reach: eBay’s platform operates internationally, allowing sellers and buyers to connect across borders. This global reach provides sellers with access to a larger customer base and buyers with a wider selection of products.
  • Competitive Landscape: While eBay is a prominent player in the e-commerce market, it competes with other online marketplaces and retailers. The company’s performance in terms of take rate, GMV, and revenue reflects its position within the competitive landscape.
  • Value Proposition: The take rate is part of eBay’s business model, which provides a platform for individuals and businesses to reach potential customers without needing to set up their own e-commerce infrastructure. The value proposition for sellers includes access to a ready-made online marketplace and a customer base.
  • Economic Impact: eBay’s revenue generation and the transactions facilitated on its platform contribute to the broader economy by fostering commerce, supporting small businesses, and providing employment opportunities for individuals engaged in e-commerce activities.
  • Ongoing Strategy: eBay’s performance metrics, such as take rate and GMV, can influence its strategic decisions. The company might continually refine its services, policies, and user experience to maintain its competitive edge and enhance the value it offers to both buyers and sellers.

Read Next: eBay Business Model

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eBay Business Model

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eBay’s core business is a platform business model that makes money from transaction fees through its marketplaces. In short, eBay primarily makes money by charging fees on successfully closed transactions. For instance, in 2021, on an $87 billion worth of gross merchandise value sold on eBay, the company generated $9.77 billion in transaction revenues at an 11.19% take rate (fee).

eBay Revenue

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In 2022, eBay generated $9.79 billion, compared to $10.42 billion in 2021. A 6% decrease year-over-year.

Is eBay Profitable?

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In 2022, eBay reported a net loss of $1.27 billion, compared to a net profit of $13.6 billion in 2021.

eBay Revenue Breakdown

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In 2022, eBay generated $9.77 billion in transaction revenue and $650 million in marketing services revenue.

How Much Does eBay Take?

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In 2021, eBay’s take rate was 11.19%. It means that eBay takes a cut of over 11% for each transaction happening through the platform. For instance, in 2021, on a total of over $87 billion in gross merchandise value on top of the platform, the company generated almost ten billion in transaction revenues.

eBay Bidding System

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eBay bidding is a way for buyers to bid on a product whose sale price is decided by auction. The bidding process itself is automated, with eBay acting on the buyer’s behalf.

eBay Organizational Structure

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eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.

Etsy vs. Ebay

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eBay vs. Amazon

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In 2021, Amazon generated almost $470 billion in revenue, vs. eBay’s over $10.4 billion. In comparison, looking at revenues, Amazon was 45x times larger than eBay.

Amazon Business Model

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Amazon has a diversified business model. In 2022 Amazon posted over $514 billion in revenues, while it posted a net loss of over $2.7 billion. Online stores contributed almost 43% of Amazon revenues. The remaining was generated by Third-party Seller Services, and Physical Stores. While  Amazon AWS, Subscription Services, and Advertising revenues play a significant role within Amazon as fast-growing segments.

Amazon Revenue By Country

Amazon Revenue By Country
In 2022, most of Amazon’s revenue came from the US, with over $356 billion in revenue, followed by Germany with $33.6 billion, the UK with $30 billion, Japan with $24.4 billion, and the rest of the world generated almost $70 billion in net sales.

Amazon Cost Structure

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Both the North American and International segment of Amazon are running at negative margins. Indeed, in 2022, for the North American segments, of almost $316 billion in revenue, Amazon spent almost $319 billion in operating costs to run it, thus it generated $2 billion in operating losses in 2022. For its International segment, of $118 billion in revenue, Amazon spent almost $126 billion to operate it. Thus, it reported a $7.7 billion operating loss. While for AWS, with $80 billion in revenue, Amazon spent $57 billion to operate it, thus generating almost $23 billion in operating income. The high operating costs are primarily due to the high cost of running Amazon’s inventory and fulfillment infrastructure behind its e-commerce operations. Indeed, Amazon is as much as a physical player as a digital one.

Is Amazon Profitable Without AWS?

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Amazon was not profitable once AWS was removed in 2022. In fact, Amazon, without AWS generated $10.6 billion in operating losses. While Amazon, without AWS, generated $12.2. billion operating income.

Amazon Profit Breakdown

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Amazon is subdivided into three operating profit segments: North America, International, and AWS. Amazon AWS is the most profitable segment, with almost $23 billion in operating profit in 2022. While Both the North American and International segments run at negative operating losses, with $2 billion and $7.74 billion in operating losses, respectively, in 2022.

Amazon Revenue Breakdown

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Amazon Revenue Per Employee

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Amazon Mission Statement

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Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.” 

Customer Obsession

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In the Amazon Shareholders’ Letter for 2018, Jeff Bezos analyzed the Amazon business model, and it also focused on a few key lessons that Amazon as a company has learned over the years. These lessons are fundamental for any entrepreneur, of small or large organization to understand the pitfalls to avoid to run a successful company!

Amazon Revenues

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Amazon has a business model with many moving parts. The e-commerce platform generated $220 billion in 2022, followed by third-party stores services which generated over $117 billion; Amazon AWS, which generated over $80 billion; Amazon advertising which generated almost $38 billion and Amazon Prime, which generated over $35 billion, and physical stores which generated almost $19 billion.

Amazon Cash Conversion

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Working Backwards

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The Amazon Working Backwards Method is a product development methodology that advocates building a product based on customer needs. The Amazon Working Backwards Method gained traction after notable Amazon employee Ian McAllister shared the company’s product development approach on Quora. McAllister noted that the method seeks “to work backwards from the customer, rather than starting with an idea for a product and trying to bolt customers onto it.”

Amazon Flywheel

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The Amazon Flywheel or Amazon Virtuous Cycle is a strategy that leverages on customer experience to drive traffic to the platform and third-party sellers. That improves the selections of goods, and Amazon further improves its cost structure so it can decrease prices which spins the flywheel.

Jeff Bezos Day One

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In the letter to shareholders in 2016, Jeff Bezos addressed a topic he had been thinking quite profoundly in the last decades as he led Amazon: Day 1. As Jeff Bezos put it “Day 2 is stasis. Followed by irrelevance. Followed by excruciating, painful decline. Followed by death. And that is why it is always Day 1.”

More Resources

About The Author

Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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