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By Lenny Rachitsky · lennysnewsletter.com · @lennysan on X · YouTube · LinkedIn
Lenny Rachitsky explains how marketplace and platform builders should choose a take rate, the fee charged on each transaction. He introduces a simple formula combining convenience and demand minus competition, walks through a step-by-step starting-point method, and explains when and how to raise or lower fees.
Subscriber post — summary only01Key takeaways
- Transaction-fee businesses must choose a take rate; it is one of four core revenue models.
- Take rate roughly equals convenience plus demand generated, minus market competition.
- Platforms that don't drive demand typically charge around 5-15%, while marketplaces often charge 10-50%.
- Lowering fees can win in winner-take-all markets, though structures like subscriptions or volume discounts help.
- Take rates are starting points; companies should experiment and tweak fees to maximize revenue.
02Frameworks mentioned
Summary and takeaways written by PM Atlas; quotes are short excerpts. © the original author.