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Business Models Business Operations

How Does SHEIN Make Money (Business and Revenue Model)

The SHEIN business model

SHEIN logo
Here’s what you should know:
  • What is SHEIN, and how does SHEIN work?
  • How does SHEIN make money?
  • Selling Merchandise & Apparel
  • SHEIN subsidiaries, acquisitions, and exits
  • SHEIN profit and revenue
  • What is the SHEIN business and revenue model?
  • SHEIN funding, net worth, and valuation

How does SHEIN make money and how is it so cheap? Well, here is a full, in depth, breakdown of their main revenue stream and services they offer, as well as the SHEIN business and revenue model, how much money SHEIN makes per year, and how SHEIN works.

What is SHEIN, and how does SHEIN work?

SHEIN is an online retailer known for its affordable priced apparel.

Founded in 2008 by Chris Xu, SHEIN now has more than 43.7 million monthly active users visiting its online store and ships across 220 countries, making it the world’s largest fashion retailer, as of 2022.

So, how does SHEIN work? To shop on SHEIN, you can simply download their app from the Apple App Store or Google Play store, or visit their website.

Once there, you can browse and shop from more than 600,000+ items for sale. And after the order has been placed, the SHEIN warehouse needs about 1-3 days to process your order.

Some of SHEIN’s competitors include ASOS, The RealReal, Stitch Fix, FashionNova, ThredUP, and other online retailers.

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

How does SHEIN make money?

According to SHEIN, SHEIN has more than 43.7 million monthly active users visiting its online store. So how does SHEIN make money off of all these customers?

Below is a breakdown of how much money SHEIN makes and its revenue model. Including their main revenue stream and how much they charge for their services.

Here is how SHEIN makes money in 2022

SHEIN has a revenue model that makes money in just one (1) way; by selling merchandise and apparel through buying it wholesale.

#1. Selling Merchandise & Apparel

To no surprise, SHEIN makes all of its money by selling merchandise and apparel through its online website and the pop-up stores they host.

But most know that and are actually wondering, how does SHEIN make any money if what they sell is so cheap? The first part of that answer is, SHEIN does not actually manufacture the clothing it sells.

Instead, SHEIN partners with third-party manufacturers to produce their SHEIN branded apparel, and gets its non-branded SHEIN products sourced from around the world (mainly in China). Then marks up the prices to make a profit when they sell it retail.

And, the second half of that answer lies in how cheap is SHEIN actually purchasing, making, and exporting these clothes for? This may lie in a combination of things like them 1) being able to avoid paying export and import taxes on orders sent to customers and 2) accusations that they partake in child or forced labor.

Note: SHEIN was considered more of a drop shipping business in the early days.

SHEIN subsidiaries, acquisitions, and exits

To date, SHEIN has made a total of 1 acquisition.

Mergers and acquisitions business model
Source: Crunchbase | SHEIN

SHEIN profit and revenue

In 2021, SHEIN brought in a reported (105.56 CNY) $15.7 billion USD in revenue.

Note: Because SHEIN is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the SHEIN business and revenue model?

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

  • Transaction based business model
  • Business to business (B2B) business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

SHEIN funding, net worth, and valuation

SHEIN’s Crunchbase profile shows SHEIN has raised $2.1 billion over 6 rounds and has a valuation of $100 billion as of May 2022.