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Business Operations Business Models

How Does Wish Make Money (Business and Revenue Model)

The Wish business model

How Does Wish Make Money?
Here’s what you should know:
  • What is Wish, and how does Wish work?
  • How does Wish make money?
  • Commission Fees
  • Advertising (ProductBoost)
  • Logistics Revenue
  • Wish’s profit and revenue
  • What is the Wish business and revenue model?
  • Wish’s funding and market cap
  • Wish’s Subsidiaries, Acquisitions, and Exits

How does Wish make money? Here is a full, in-depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the Wish business model, their year-over-year revenue, and how Wish works.

What is Wish, and how does Wish work?

Wish is an online e-commerce marketplace that handles transactions between buyers and sellers.

Founded in 2010 by Piotr Szulczewski, Wish now has more than 100 million monthly active users, over 550,000 merchants, and approximately 1.7 million items are sold per day on the platform.

How Wish works is: In order to shop on Wish, users must first make an account. Once created, users can browse offers on the marketplace using the Wish app or on Wish.com.

Some of Wish’s competitors include Amazon, eBay, Mercari, Poshmark, Etsy, and other e-commerce marketplaces.

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

How does Wish make money?

According to page 7 of Wish’s 2020 Form 10-K, Wish has more than 100 million monthly active users, over 550,000 merchants, and approximately 1.7 million items sold per day. So how does Wish make money off of all these users, merchants, and items sold?

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

Here are the 3 ways of how Wish makes money (in 2021):

Wish has a revenue model that makes money in three (3) ways – commission fees, advertising, and logistics revenue.

#1. Commission Fees

Wish makes the majority of its money through commission fees. In fact, $1.83 billion or 71.9% of Wish’s total revenue came from commission fees in 2020.

As mentioned above, Wish has more than 550,000 merchants selling roughly 1.7 million items per day on its marketplace. Of which, Wish earns a commission fee on each of those items sold.

The way Wish commissions fees work is: Once an item sells on the marketplace, Wish will take a 5% to 25% revenue share of the sales price depending on the category the item sells under.

Wish Seller Fees:

  • 5% to 25% revenue share

Note: 71.9% of Wish’s total revenue came from commission fees in 2020.

#2. Advertising (ProductBoost)

In addition to commission fee revenue, Wish also makes money through its merchant-side advertising that they call ProductBoost which made Wish $200 million in revenue in 2020.

ProductBoost is a marketing tool for merchants who are selling on the marketplace to have the option to “boost” their listings for more product visibility.

The way ProductBoost works is: Wish uses an impression-based ad model, meaning the merchant gets charged by the impressions on their advertised listing. Once the merchant’s ad campaign reaches its budget, the fee is then deducted from the merchant’s payment cycle.

Wish ProductBoost | Wish Business Model | How Does Wish Make Money?
Source: Wish

#3. Logistics Revenue

Introduced in 2018, Wish’s Logistics service is another tool offered for merchants selling on the platform. Logistics services, according to Wish on page 57 of Wish’s 2020 Form 10-K, “include transportation and delivery of the merchant’s products to the user.”

The way Wish makes money from this is by merchants prepaying Wish for the logistics services per order. In 2020, Wish’s Logistics service brought in $514 million of revenue.

Wish partners with a few shipping carriers (ChinaPost, EMS, and SAMYOUNG) and tracking providers (17Track.net and AfterShip) to make this all logistically possible.

Note: 20.2% of Wish’s total revenue came from its Logistics services revenue in 2020.

Wish’s profit and revenue

In 2020, Wish reported $2.54 billion in revenue.

Note: Because ContextLogic Inc. (Wish) 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 Wish’s publicly released financial reports, including annual reports, through Wish’s investor section on their website.

What is the Wish business and revenue model?

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

  • Revenue Sharing business model
  • Advertising business model
  • Mergers & acquisitions (M&A) business model

Wish’s funding and market cap

According to Wish’s Crunchbase profile, Wish has raised $2.1 billion over 16 rounds and has a market cap of $4.46 billion as of September 2021.

Wish’s Subsidiaries, Acquisitions, and Exits

To date, ContextLogic Inc. (Wish) has made a total of 1 acquisition.