The Smarter Startup

How to Measure Marketplace Success: Stage 1, Marketplace Metrics

Marketplace Metrics help founders manage their business, benchmark progress and build a story for VCs to easily evaluate performance.

Every marketplace is different, but at its core, each marketplace has a seller (supply) and buyer (demand) side, acting as an intermediary to bring them together. The metrics VCs use to benchmark marketplace companies are consistent but evolve as the company matures.

Marketplace Metrics help founders manage their business, benchmark progress and help build your story for VCs to easily evaluate your performance.

Tracking these marketplace metrics makes it possible to determine the areas in which the marketplace is running effectively, where improvements are needed, and how to adjust your overall marketplace to optimize performance.

Use a Staged Approach

Burkland recommends using a staged approach. Start with stage 1, build data integrity around a few core metrics, and then add more KPIs over time as your business and processes mature. Not all companies mature at the same rate, but stage 1 metrics are typically the focus through Series A.

By the time you get to stage 4 KPIs / Metrics, you will have become a data-driven organization with confidence in the integrity of the data you are tracking. In future blogs we will dive into stage 3-4 Marketplace metrics.

Stage 1 Metrics

There are over twenty-five metrics in Burkland’s Marketplace dashboard, but in this article, we focus on six Stage 1 metrics that all Seed and Series A marketplace companies should track.

“I highly recommend not doing them all at once, or your team will be overwhelmed. Build competency over time and you will have greater confidence in your numbers.”
– Ramon Simms, Burkland CFO

Gross Merchandise Value (GMV)

One of the most important marketplace KPIs is gross merchandise value. GMV is the total sales dollar value for goods sold or services purchased through the marketplace during a given period. It represents how much money has flowed through the platform within a given period.

GMV = # of Transactions * AOV

Growth Rate of GMV

Founders should track GMV’s growth rate on a monthly and yearly basis to measure the actual growth of the business.

Average Order Value (AOV)

Also referred to as basket size or value per transaction, tracking AOV over time can help evaluate how changes in strategy are impacting the efficiency of your business.

With GMV and the total number of transactions, we can compute the average order value (AOV).

AOV = GMV / # of Transactions


Revenue is the income the company receives from facilitating connections in the marketplace. Revenue can be calculated by adding up all transaction fees, commissions, listing fees, and/or the offering of premium seller/supplier services.

Or backed into /checked by: GMV $s x Average Take Rate %

Take Rate (%)

GMV can provide visibility to the size of a marketplace, but it does not represent actual revenues for the marketplace owner. To get an accurate view of revenue, you need to understand your take rate. Your take rate is the marketplace’s average commission on the sales by third-party sellers across the entire marketplace. It is also a measure of the business’ efficiency.

A high take rate means the marketplace delivers a strong value proposition to buyers and sellers.

Revenue $s / GMV $s

Customer Acquisition Cost (CAC)

In addition to take rate, we can evaluate high-level business efficacy by calculating the total customer acquisition cost (CAC) of buyers and sellers/suppliers as a percentage of revenue.

CAC / Revenue $s

This is the first in a series of articles that will culminate in a complete Burkland Marketplace Metrics Dashboard (Stage 1- 4).

In Stage 2 Marketplace Metrics we will focus on Efficiency and Liquidity metrics.