- What is Mercari, and how does Mercari work?
- How does Mercari make money?
- Seller Fees (Commission Fees)
- Transaction and Payment Fees
- Cancellation Fees
- Legal Services
- Additional Services Offered
- Mercari’s profit and revenue
- What is the Mercari business and revenue model?
- Mercari’s funding and market cap
- Mercari’s Subsidiaries, Acquisitions, and Exits
How does Mercari make money? Here is a full, in-depth, breakdown of their five (5) revenue streams and the different products and services they offer, as well as the Mercari business model, their year-over-year revenue, and how Mercari works.
What is Mercari, and how does Mercari work?
Mercari is a Japanese e-commerce company that is a marketplace connecting buyers and sellers on the platform.
Founded in 1991 by Shintaro Yamada, Mercari later went on to launch its main product Mercari marketplace app in 2013. Since that time, the marketplace has grown to more than 4.6 million monthly active users (“MAU”) and more than 350,000 new items are being added daily.
How Mercari works is: To buy or sell anything on Mercari, users must first create an account. Once signed up, users can browse from over a reported 2 billion listings on the marketplace.
How does Mercari make money?
According to pages 13 and 25 of Mercari’s FY2021 Presentation Report, in the US, there were 343 million sales that made up for $1.17 billion of gross merchandise value (“GMV”) transacted on the platform in 2020. As well as 4.6 million monthly active users (“MAU”).
So how does Mercari make money off of all those users, sales, and gross merchandise volume sold on the platform?
Below is a breakdown of how much money Mercari makes and its revenue model. Including all revenue streams and how much they charge for their services.
Here are the 5 ways of how Mercari makes money (in 2021):
Mercari has a revenue model that makes money in five (5) ways – commissions, transaction fees, cancellation fees, legal services, and additional services offered.
#1. Seller Fees (Commission Fees)
Like any other marketplace, Mercari makes the majority of its money from seller fees or “commission fees” they charge the seller.
As mentioned above, over $1.17 billion of gross merchandise value (“GMV”) was transacted on the Mercari marketplace in 2020. Of which, they collect a 10 percent commission on each sale.
Mercari Seller Fees:
- 10 percent commission of each sale
#2. Transaction and Payment Fees
Some other fees Mercari makes money from are transaction and payment fees.
Transaction fees are in addition to Mercari’s 10% seller fee. Meaning, Mercari takes a total of 12.9% plus $0.30 of each sale transacted on the marketplace.
The way payment fees work is: Whenever a seller withdraws their funds from their seller balance into their bank account, a payment fee is charged. The amount depends on the withdrawal method and the amount withdrawn. For example, direct deposit withdrawals under $10 will incur a $2 fee, while direct deposits over $10 are free. But if a seller withdrawals their balance using instant pay, a $2 fee will be charged on every instant pay withdrawal regardless of the amount.
- Payment Processing Fee: 2.9 percent plus $0.30 per sale
- Direct Deposit Fee: $2 for withdrawals under $10
- Instant Pay Fee: $2 for each completed Instant Pay transfer
Note: Mercari takes a total of 12.9 percent + $0.30 from each sale (Seller fees + transaction fees).
#3. Cancellation Fees
Mercari charges sellers a fee whenever they cannot fulfill an order for whatever reason. The fee will be deducted from the sellers’ balance.
Mercari Cancellation Fee:
- 5 percent of the item price (maximum of $25)
Note: Sellers will first receive a warning if they cancel too frequently before being charged the fee.
#4. Legal Services
In addition to all of the seller transaction fees mentioned above, another way Mercari makes money is through providing legal aid for Law Enforcement and Government Agencies.
Whether it be for a subpoena, court order, search warrant, etc. Mercari charges per hour for the cost of subpoena processing says the company.
Mercari Legal Services Cost:
- $25 per hour
Note: This fee is charged to and is paid by the Law Enforcement and Government Agencies requesting information.
#5. Additional Services Offered
Mercari also provides some additional services for buyers or sellers on the platform. These additional services offered are product authentication, certificates of authenticity, and warranties.
- Product Authentication: $5 charged to the seller
- Certificates of Authenticity: $10 charged to the seller
- Warrenties: varies, charged to the buyer
Mercari’s profit and revenue
In 2020, Mercari reported $964.7 thousand in revenue (¥106.1 million).
Note: Mercari, Inc. is a publicly traded company in Japan and is listed under the Tokyo Stock Exchange (TYO) under the issed name 43850. You can find all of Mercari’s publicly released financial reports, including annual reports, through Mercari’s investor section on their website.
What is the Mercari business and revenue model?
Mercari 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
Mercari’s funding and market cap
According to Mercari’s Crunchbase profile, Mercari has raised $160 million (¥17.6 billion) over 7 rounds and has a market cap of $8.77 billion (¥965.46 billion) as of September 2021.
Mercari’s Subsidiaries, Acquisitions, and Exits
To date, Mercari, Inc. has made a total of 3 acquisitions, 10 investments, 1 lead investment, and 2 successful exits.