Recommerce has become a meaningful part of commerce across fashion, electronics, luxury, furniture, and a growing range of other categories. Over the past decade, the sector has also produced a wide range of business models, from P2P marketplaces such as Vinted, to managed marketplaces such as ThredUp and The RealReal, and first-party resellers (who acquire secondhand inventory on their own books) such as Swappie.
These models operate with very different economics. At one extreme, peer-to-peer platforms like Vinted are limiting their role largely to moderation, lead gen. and, increasingly, providing a payments and delivery infrastructure - often with “buyer protection” baked in.
At the other extreme, fully-managed marketplaces take physical possession of the item (legal possession only in first party models), process, authenticate, list, store and fulfil, either on a consigned or owned basis (or sometimes both). The cost required to source, inbound, process store, prepare and ship each item is much higher than in operating a peer-to-peer platform, but so is the share of transaction value the platform can justify retaining given the service they are providing.
We wanted to understand how long different recommerce marketplace models have taken to reach profitability.
We analysed the historical P&Ls of recommerce businesses across Europe and the US. We have included the prominent listed players, as well as large private players whose financial statements are readily available. Time to profit varies from 1 year to 26 years.
B2B marketplace Liquidity Services reached its first profitable year just 3 years after founding, although largely thanks to 1P purchases of government surplus at heavily discounted rates. The fastest consumer platforms Momox and TrenDevice took around 5 years. ThredUp and Vinted took around 15 years, while 1stDibs only crossed into positive adjusted EBITDA after 26 years.
Faster is not necessarily better, especially where profits from one geography are re-invested in synergy creating new geographies and thus expanding the longer term scale of the marketplace.
Across the 15 companies in our analysis that have reached positive EBITDA or operating, the median time to profitability is 12 years. Several others we evaluated, including Vestiaire Collective (17 years since founding), Sellpy (12 years), Wallapop (13 years), Refurbed (9 years), Ovoko (10 years) and Largo (10 years), have yet to report a profitable year.
These platforms spend years building supply, demand, trust, transaction history and, in some models, physical infrastructure. Once established, these assets can support significant operating leverage and become increasingly difficult for a new entrant to replicate.
First-party resellers reached profitability faster despite funding inventory
Despite taking inventory risk and performing the associated physical work, the few first-party resellers in our sample reached their first positive result in a median of 9 years, compared with 14 years for managed marketplaces.
Swappie, which acquires electronics inventory from consumers and businesses, achieved relatively modest 20% gross margins between 2022 and 2024. Its path to profitability came primarily through operating leverage, with personnel costs falling from ~17% of revenue in 2022 to ~9% in 2024. Swappie reached full-year EBITDA profitability in 2025, after operating for nine years.
The first-party model provides an additional lever over unit economics through the acquisition margin of inventory. Once a sufficient gross margin is secured from scaled purchases, profitability growth depends on operating leverage in processing, personnel and other operating costs.
P2P and other asset light marketplaces reach profitability as marketing spend is scaled back
The P2P and other asset-light marketplaces that reached profitability in our sample took a median of 11 years. The cost base is much lighter, but the early years typically involve substantial investment in acquiring buyers and sellers, and building marketplace liquidity.
In the case of Vinted, marketing represented 47% of revenue in 2020 and 79% in 2021; marketing fell to 38% of revenues in 2022 and 27% in 2023, the year Vinted reached operating profitability. By 2025, marketing spend had increased from ~€194m in 2021 to €331m, but remained at 29.6% of revenue on a revenue base more than four times larger than in 2021.
Poshmark followed a similar pattern. Marketing represented around 60% of revenue in 2018 and 65% in 2019, before falling to ~35% in 2020, when Poshmark first reached adjusted EBITDA profitability. It remained profitable in 2021, but adjusted EBITDA margin fell from 14% to 2.2% as marketing increased to ~44% of revenue. By 2022, adjusted EBITDA margin had fallen back to -8.4%, marking a return to losses after two profitable years.
The economics improve as the marketplace builds network effects and thus becomes less dependent on growth from paid marketing. The underlying liquidity, selection and repeat behaviour increasingly drive transaction growth.
eBay was profitable from its first full financial year in 1996. Its first two years of buyer and seller acquisition came almost entirely through word of mouth, and the marketplace was initially offered for free to build critical mass. Sales and marketing represented only 8.6% of revenue in 1996. eBay then increased marketing to 30.1% in 1997 and 41.9% in 1998, while revenue increased from $0.4m to $47.4m. Operating margin remained positive at 25.9% in 1997 and 13.0% in 1998.
eBay benefited from establishing liquidity before competition for online buyers and sellers became as intense as it is today. By the time competition intensified, eBay had already built a marketplace with sufficient selection and buyer demand to continue investing heavily in growth while remaining profitable.
This is one of the most attractive characteristics of scaled marketplace models. The investment required to create liquidity can be significant, but once established that liquidity can become both a source of operating leverage and a barrier to entry. We believe this still holds true with AI.
Managed marketplaces need more scale to absorb the broader cost base
Managed marketplaces operating the consignment model avoid inventory investment, but still incur the cost of sourcing, inbounding, processing, storing and fulfilling each item. Their path to profitability has therefore depended on improving both the take rate from each transaction and leveraging the operating cost base.
The RealReal has reached profitability through both higher revenue capture and operating leverage. Its take rate increased from 36% in 2022 to 38.4% in 2024, while gross margin increased from 57.8% to 74.5% in particular by lowering the volume of sub $100 goods crossing its platform. At the same time, operations and fulfilment costs remained broadly flat, at $279m in 2022 versus $276m in 2025, while revenue increased from $603m to $693m. The cost of receiving, authenticating, photographing, storing and shipping items fell from 46.2% to 39.8% of revenue, helping adjusted EBITDA margin reach 6% in 2025.
ThredUp operates a consignment model for mainstream fashion ($20-$30 items). Their 60%-70% take rate proves that for many segments the convenience of a clean out kit outweighs the seller’s wish to maximize their sale proceeds. From 2023-24, gross margin increased from 76.8% to 79.7% of net revenues, and adjusted EBITDA margin rose from -2.1% to +3.3%. Operating leverage then became more visible in 2025, when revenue increased 20% but operations, product and technology increased only 8%, reducing this cost line from 54.7% to 49.2% of revenue. Adjusted EBITDA margin increased to 4.4%.
Even at gross margins around 70%, 40-50% of revenue is absorbed by physical processing and the broader operating cost base, which helps explain the longer path to profitability for managed marketplaces more generally. It also suggests that operating leverage can continue to deliver margin as volume grows, since the cost base does not scale in line with revenue.
It’s hard to get excited about 5% EBITDA margins. But with the benefits of AI-driven process automation and enhanced matching we expect EBITDA margins of 15%-20% to be achieved by the most efficient managed marketplaces over the next few years.
B2B marketplaces reach profitability faster when supply is concentrated
Liquidity Services reached profitability 3 years after founding, materially faster than the consumer platforms in our sample. In its first profitable year, marketing was only ~4% of revenue.
A key difference is the structure of supply. Liquidity Services sources surplus, returned and end-of-life assets from commercial and government sellers, so a relatively small number of relationships can bring large and recurring volumes of inventory onto the marketplace.
This reduces the cost of building supply-side liquidity compared with consumer P2P marketplaces, where inventory is fragmented across millions of individual sellers and has to be acquired continuously.
Closing Thoughts
We understand that for the majority of investment committees, the prospect of waiting 15 or more years for a business to make single digit EBITDA margins is a tough call. For those marketplace that have come this far, we see a brighter future. Especially in recommerce. The uniqueness of supply and its highly fragmented ownership, makes this one of the sectors LLMs and agentic platforms are least likely to be able to disrupt. Network effects are likely to continue to strengthen for the vertical and horizontal leaders, and this combined with a new generation of smart automation enabled by AI, makes us confident that EBITDA margins can grow substantially in this sector. Perhaps eBay’s 2.5x market cap increase since the “ChatGPT moment” is supportive evidence?
EIV is very active in the funding and sale of recommerce marketplaces. If you own one, we would love to talk.
