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Business Operations Business Models

How Does Depop Make Money (Business and Revenue Model)

The Depop business model

How Does Depop Make Money?
Here’s what you should know:
  • What is Depop, and how does Depop work?
  • How does Depop make money?
  • Commission Fees (Depop Fee)
  • Depop’s profit and revenue
  • What is the Depop business and revenue model?
  • Depop’s funding and valuation

How does Depop make money? Here is a full breakdown of their main revenue stream, as well as the Depop business model, their year-over-year revenue, and how Depop works.

What is Depop, and how does Depop work?

Depop is a marketplace for buying, selling, and reselling items like vintage clothes, sneakers, jewelry, and more.

Founded in 2011 by Simon Beckerman, Depop went on to become acquired by Etsy for $1.6 billion on Jun 2, 2021. Now, Depop has more than 30 million registered users in over 150 countries.

How Depop works is: Whether a buyer or seller, users must first create an account. Once signed up, buyers can browse from over 32 million items available on the marketplace. And sellers can list as many items for free and get charged a transaction fee only once the item(s) sell.

Some of Depop’s competitors include Poshmark, EtsyOfferUpVinted, Mercari, Facebook Marketplace, eBay, Amazon, and other marketplace apps.

Depop App in Apple App Store | Depop Business Model | How Does Depop Make Money?
Source: Apple App Store | Depop

How does Depop make money?

According to Depop’s facts and figures page, Depop has more than 30 million registered users in over 150 countries. As well as 32+ million items available for sale on Depop with up to 140,000 new listings being created per day.

So how does Depop make money off of all those registered users and items sold?

Below is a breakdown of how much money Depop makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here is how Depop makes money (in 2021):

Depop has a revenue model that makes money in just one (1) way – commission fees.

#1. Commission Fees (Depop Fee)

Depop makes all of its money by charging commissions fees on every sale made on its platform.

The way Depop seller fees work is: Sellers can list as many items as they want for free. But when the item sells, Depop takes a 10% fee from the total transaction cost. The total transaction cost is the price of the item(s) plus shipping costs.

As noted above, there are currently more than 32 million items available for sale on Depop, and over 140,000 new listings are being created per day.

Depop Seller Fees:

  • 10% fee of total transaction
Depop Seller | Depop Business Model | How Does Depop Make Money?
Source: Depop

Note: Depop has not disclosed how many sellers are on the platform or what its Gross Merchandise Volume (“GMV”) is.

Depop’s profit and revenue

In 2020, Depop is reported to have made $70 million in revenue.

Note: Because Etsy, Inc., the parent company of Depop, is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Etsy’s publicly released financial reports, including annual reports, through Etsy’s investor section on their website.

What is the Depop business and revenue model?

Depop makes money through a few revenue models that they combine within their company, they are:

  • Commission based business model
  • Fee-for-service (FFS) business model
  • Mergers & acquisitions (M&A) business model

Depop’s funding and valuation

According to Depop’s Crunchbase profile, Depop has raised $105.6 million over 7 rounds.

Depop was acquired by Etsy for $1.6 billion on Jun 2, 2021.