Regular readers of this blog will know that I love Vinted.
I’m a buyer and a seller on the platform, and although I don’t use it as a business like some people do (I only sell my own clothes periodically) I would like to think I’m fairly clued up on how it all works and the services they offer.
One of the things everyone loves about Vinted is that it is free to sell your products on there. If you manage to flog a pair of leggings for £6.50 you get that whole amount sent to your bank account. No deductions.
But if selling is free, how do Vinted make money?
It’s a fair question, and actually, it is something the company struggled with themselves in the beginning. When they first launched the platform was 100% free for buying and selling because they were trying to build a user base. Then they attempted to monetise it but things didn’t go to plan and the user base went into decline.
There was even a point in time when Vinted was only 9 months from closing down. I know! I would never have found those amazing denim dungarees if that had happened. Tragic.
They then changed their model to keep selling completely free, which attracted sellers, then because the app was loaded with so many cheap clothes, this attracted buyers and the circle was complete.
This was all before they expanded into the UK, so they had their setup sorted by the time any Brits got their hands on the app, and it has gone down a treat here too.
Now that potted history of Vinted is complete, I will tell you how they make over £500 million in revenue a year.
Buyers Pay the Fees
That’s right. If you want a to buy a Hoodrich hoodie for a knockdown price you have to pay for it. Although you shouldn’t buy Hoodrich because you’re probably not a ‘product of the streets’, but that’s besides the point.
The brilliance in Vinted’s fee structure, is that buyers pay a very small percentage of the purchase price as a fee to use the service. This means the fee is relative to what you are paying for, so a cheap £5 t-shirt will incur a much smaller fee than an expensive designer hoodie in perfect condition.
That additional amount will not be enough to make the purchase significantly more expensive relative to the saving, so buyers are happy to pay it.
All sales are subject to a fixed fee between 30p and 80p for Buyer Protection, plus another fee of 3%-8% of the purchase price, although this will be displayed as a single price. This is assuming your order is under £500 in value. If it is £500 or more there is a flat 3% fee.
The variation between the fixed fee amounts and the percentage fee amounts has never been made clear, but I would assume it’s done on some sort of price ladder. So the more expensive something is the smaller the percentage? That would be my guess anyway.
What’s this Buyer’s Protection, you ask? It’s to ensure the your experience is a good one, and that any issues are handled for you.
For that small fee, you get:
- Access to customer support (and it’s very good, I’ve used it)
- Guaranteed safe payments
- Data protection
- Total refund policy
As an example, if you bought a pair of barely worn shoes for £30 (RRP of £60), you might pay a 50p fixed fee and a 5% purchase fee of £1.50. So you end up paying £32 plus postage. Still a great saving and if the seller has misled you in any way you have protection.
Vinted are a private company so detailed info on where their money comes from isn’t available, but I would estimate a good 50% of their revenue comes from these tiny fees. The company operates all over Europe and has 105 million registered users – that’s a lot of 50ps.
Item Verification
When purchasing designer items worth £100 or more, buyers get the option to have that item professionally verified before it is shipped out to them.
Vinted charge £10 for this service regardless of the cost of the item, and if you are spending a few hundred pounds on something it is probably worthwhile doing.
They probably don’t make a huge amount from this since they have to ship the item to their warehouse, get it manually checked and verified by an expert, then have it repackaged and sent back out to you. Still, they will be making a bit of money or they wouldn’t offer it in the first place.
This is probably one of those services they need to offer to make people feel safe spending large amounts o the platform, but if it can wash its own face (as my Dad used to say) then it’s additional revenue nonetheless.
Optional Extra Services for Sellers
I said selling on Vinted is 100% free, and that’s true. However, sellers can choose to buy additional services if they want to.
This isn’t something your average Joanna would need to do when decluttering her wardrobe, but for people who sell more often or have expensive items listed, it can be useful.
There are a few different options here so I’ll talk about them all separately.
Bump Your Listing
When you list an item on Vinted, it is displayed towards the top of all the listings because it is new. So they show newer items first. Obviously then, as time goes on your listing will fall further down the listings and be seen by fewer people.
It can still be found when people use filters or if the scroll for long enough, but unless very specific searches are made your listing will still get fewer views the longer it remains unsold.
To counter this, you can pay for a bump.
When you bump your item, it is boosted back up to the top of the listings for either 3 or 7 days. You decide the length of time, and this will impact the price, which is worked out based on the value of your item. There isn’t a set price here but you will know what it is before you agree to it. It won’t be much, but for cheaper items it can be a bit pointless.
The way to get around this of course is to take the listing down and re-list the item. It’s a faff, but this way you can effectively bump your Vinted listing for free.
Wardrobe Spotlight
You need at least 5 listings for this one, but the more the better really.
It’s another paid service whereby Vinted charge a small fee to show up to 5 of your most relevant items to potential buyers. They specifically promote your items to people who are most likely to buy them too, so it’s not random. How? Well, I don’t know. Some algorithm or something. I’m not a software developer, but it works.
Your items are promoted within specific searches and on people’s news feeds, so Vinted target buyers in multiple ways with this one. It’s also easier for buyers to tap through to your entire wardrobe or follow your store from a Wardrobe Spotlight, so anyone with plans to sell as a side hustle might be interested in this as a strategy to increase visibility long term. They say buyers are 3x more likely to buy from a seller with followers than without.
You also get insights into how many people have been viewing each individual item so it’s helpful for understand what is and isn’t going down well. You can then adjust your listings based on the feedback.
Again, pricing depends on the specifics of your wardrobe, but you will be shown the price before you agree to anything.
Collections
The final way Vinted make money from sellers is with collections.
You probably need several wardrobes worth of clothes to make this one worthwhile, but if you are having a massive clear out or selling as a business it’s a great feature.
You can arrange your items into different collections and give them descriptive names (Boys Shorts, Summer Time, Swimwear, whatever), and Vinted will promote the collections in buyers’ newsfeeds as well as pinning them to the top of your wardrobe for 14 days. You can also quickly apply discounts to everything in a collection in a single process, so it would knock 10% off every individual item if you told it too, and let buyers know about the discount too.
There is a set fee for this service, although it is tiered depending on how many different collections you want to go live.
You will pay either:
- £8.95 – 3 collections
- £10.95 – 5 collections
- £12.95 – 10 collections
Each collection can have up to 20 items included so at the more expensive end you’re looking at up to 200 items. This is why I say it’s best for those doing a major declutter or selling as a business. That said, you only need 5 items to create a collection.
You can switch items in the collections whenever you want so it’s not fixed once it goes live, and you can create up to 15 draft collections only visible to you, then send them live when you are ready.
Shipping Partnerships
When sales are made through Vinted, the buyer chooses to either get a home delivery via Yodel or Evri (in the UK at least), or pick it up from their nearest InPost locker.
In other words, you have to use their partner delivery services.
The buyer pays for delivery and the seller is simply sent a label to print out and stick to the package, so the seller has no control over this side of things. It’s not like ebay where the seller chooses which delivery services the buyer can use.
Now I don’t know the specifics of this, but Vinted will have an agreement with the delivery services they work with. I imagine they make a very small cut of the delivery fee in return for sending so much business in the delivery service’s direction.
This is another way the company make money.
Advertising
Although it’s not immediately obvious, Vinted do have adverts on their platform.
You probably won’t notice them as you are browsing, they don’t get in the way or take up screen space in the form of banners or anything, but they do exist.
For example, when I bought a beanie hat for my partner (which he never wears…) the algorithm obviously thought I was a man, because after the sale went through I was told I had unlocked a ‘special offer’. This was a discounted subscription to Harry’s, the razor blade/shaving company.
Now Harry’s have paid to have their service offered at this point, and I assume there are other companies who have done the same so that Vinted can tailor their ads to buyers.
This will be a good source of income for Vinted, and it doesn’t cause any friction for the user either because it happens post sale and the ad can be done away with really quickly if you’re not interested.
They might even get some sort of affiliate commission for every customer they pass on to their advertising partners.
Revenue
That is all of Vinted’s different revenue streams – that I know of anyway.
The company finally became profitable in 2023 after 6 or 7 years of spending more than they made. You can see from the clever graph that I found (above) how their income has rocketed in recent years.
That is all from 50p here here and £1.20 there. Drips and drabs multiplied by millions of customers making many more millions of transactions, generating hundreds of millions of pounds for the company.
Vinted have expanded on what people are allowed to sell too, and this will attract more customers to the platform and drive even greater levels of income.
They may eventually find other ways to monetise their platform, but for now, this is their model.