Vinted's Business Model & How They Make Money in 2023 (2024)

Founded in 2008 by two entrepreneurs, the Lithuania-based clothing exchange marketplace Vinted now employs over 1,200 people across offices in various European cities, including Vilnius, Berlin, Prague, Amsterdam, and Utrecht.

From its humble beginnings as a way for one of the founders to downsize her wardrobe, to one of the world’s biggest second-hand clothing marketplaces serving 16 global markets, Vinted certainly has an interesting story and business model that make it worth taking a look at.

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What Is Vinted?

Vinted is an online marketplace where people can sell clothing and wardrobe accessories to one another, with an emphasis on used and vintage clothing, as the name implies.

However, users are also free to sell new clothing items on the site, and it’s a great place to buy rare or out-of-production apparel that you can’t find anymore in retail stores.

Vinted’s goal is to make second-hand fashion the first choice for online shoppers, ultimately prolonging the lifespan of existing apparel and reducing waste related to the global fashion industry.

The company’s slogan is “Don’t wear it? Sell it!”

How Does Vinted Make Money?

Since Vinted doesn’t charge sellers a commission on their deals, you may be wondering how Vinted makes money.

Well, Vinted has four main revenue streams: buyer protection fees, closet spotlights, bumping listed items, and third-party advertising.

Below are more details on how each of these parts of Vinted’s business model work.

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1) Buyer Protection Fee

Although Vinted doesn’t charge sellers anything, it does charge buyers a fixed buyer protection fee of $0.70 on all deals, plus an additional variable fee of 5% of the total sale price.

This buyer protection fee covers things like damaged or lost items, items that are different than described, fraud, and more. If everything goes well with an order, Vinted keeps this fee as revenue.

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2) Closet Spotlight

Vinted’s closet spotlight feature is a way for sellers to promote certain items to users who might purchase them, based on their fashion preferences.

Sellers pay $6.95 to use the closet spotlight feature, after which five items chosen automatically from the seller’s catalog appear in special spots on buyers’ news feeds for the next seven days.

Sellers must have at least five items in their catalog for this feature to continue running, and a close spotlight will pause if a seller’s number of available items drops below five.

Vinted shows sellers different statistics for their closet spotlights, including how many users saw them, clicked on items, and saved items as favorites.

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3) Bumping Listed Items

Another way Vinted earns money from sellers is through bumping listed items. Like closet spotlights, bumping items is a way for sellers to get more visibility for their wardrobes by paying a fee.

The exact cost to bump an item varies depending on different factors, such as the item’s category, its price, and the total number of items currently bumped on Vinted. The fee can be anywhere from $0.05 to $5.

When a seller bumps an item, they can choose to purchase the bump for three or seven days. Naturally, if an item gets sold, it no longer appears as bumped.

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4) Third-Party Advertising

The fourth way Vinted makes money is by allowing third-party advertisers to serve up ads on the site’s news feeds and listing pages.

Vinted offers advertisers a self-service platform through which they can register and create campaigns. The site does not list pricing, but Vinted most likely charges advertisers different fees based on impressions and clicks.

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Where Did Vinted's Idea Come From?

Way back in 2008, Lithuanian entrepreneurs Milda Mitkute and Justas Janauskas founded Vinted in Vilnius, Lithuania.

The initial idea for Vinted arose because Mitkute was moving and had too many clothes to take with her. Janauskas and her discussed building a website for trading used clothing items between peers, and thus Vinted was born.

The two co-founders quickly got to work building an MVP for Vinted, which was originally a forum-style website where users could post items they wanted to get rid of and make deals with one another.

In the beginning, Vinted’s user base grew mainly by word of mouth, and the site became so popular within a short amount of time that Vinted began expanding its business model to other European countries, starting with Germany.

This early success caught the eye of Lithuanian angel investor Mantas Mikuckas, who backed the company and became COO in 2013.

Just a couple of years later, in 2015, Vinted raised €25 million and used it to expand outside of Europe into the US, opening an office in San Francisco.

However, despite a rapidly growing user base of millions, it wasn’t long before Vinted ran into cash flow problems and was forced to shut down its offices in the US and several major European cities.

Perhaps this was a blessing in disguise, as Vinted was able to refocus on a few of its core markets and turn the company around.

Vinted brought on a new CEO, Thomas Plantenga, in 2017, and by 2020 were again experiencing high levels of success, in part due to the coronavirus pandemic creating more demand than ever for online shopping.

Vinted now has a user base of more than 45 million people globally and has a gross transaction volume of approximately €1.3 billion, while still remaining true to the company’s original idea.

How Does Vinted Work?

At the core of Vinted’s business model, there are two types of users: buyers and sellers. Anyone who wants to buy or sell clothing and accessories on Vinted just has to create an account on the platform.

Vinted sellers can list apparel in several different categories, including men’s, women’s, and children’s apparel.

Pretty much any type of apparel or accessory can be listed for sale on Vinted, including tops, bottoms, shoes, bags, hats, belts, jewelry, sunglasses, beauty products, and more.

There is no fee to list items on Vinted, and sellers get to keep everything they make through the platform. Shipping is paid through Vinted by the buyers.

When a seller creates a profile on Vinted, they must take photos of the items they want to sell and add detailed descriptions of their goods. These listings then appear in the news feeds of other vinted users, who can follow certain sellers and add items to their favorites.

Vinted is a prime example of what’s often called a “social selling platform” — it works a lot like Instagram, but for selling second-hand fashion goods.

When a buyer finds something they like on Vinted, they can easily purchase it for the asking price or make an offer below the price it’s listed at. Sellers can then accept or reject these offers, or make a counter-offer for a different price.

When a sale is made, Vinted generates a prepaid shipping label for the seller, who then simply has to pack the items they’re selling, stick the label on the package, and send it off to the buyer within five days.

Vinted provides buyers with purchase protection in case anything goes wrong with their purchases, and sellers only get money deposited into their Vinted accounts after buyers have received their orders.

Vinted also handles marketplace refunds whenever necessary. In the event that a package goes missing in the post, Vinted typically refunds both the buyers and the sellers, so neither party loses money.

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How Much Money Does Vinted Make?

As a privately-held, venture-backed company, Vinted is not required to and does not make its revenue figures public. The company’s last reported revenue, in 2018, was €​32.9 million.

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Is Vinted Making a Profit?

Since Vinted’s revenue and expenses are not verifiable, it’s hard to say whether or not Vinted is currently making a profit.

In order to confirm this information, we would need to wait for Vinted to hold an IPO and start making its financial reports public.

At the time of writing this article, Vinted has not announced any plans to go public.

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How Much Money Has Vinted Raised?

According to Vinted’s Crunchbase profile, the company has raised a total of $562.3 million across six funding rounds.

Most recently, Vinted raised €250 million in a Series F funding round in May of 2021.

Notable Vinted investors include Accel, Insight Partners, Lightspeed Venture Partners, EQT, Burda Principal Investments, and Sprints Capital.

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What Is Vinted’s Ownership Structure?

Vinted is a privately-held company, meaning that its co-founders, executives, and investors each hold different stakes in it.

Vinted’s key investors and leadership team include co-founders Milda Mitkute and Justas Janauskas, COO Mantas Mikuckas, and CEO Thomas Plantenga.

The company is also backed by various venture capital films, including those mentioned above.

While it cannot be verified how much of a stake each of these individuals and firms has in Vinted, it’s likely that Platnega, acting CEO, is the largest individual equity holder.

It’s also likely that each of the venture capital firms that have led funding rounds own significant equity in the company.

Since Platenga and Mikuckas lead Vinted’s daily operations and growth and co-founders Mitkute and Janauskas are not as involved in the company as they used to be, it’s possible that the co-founders have sold off large chunks of their equity in recent years.

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How Much Is Vinted Worth?

Vinted’s most recent valuation was $4.5 billion. According to TechCrunch, Vinted surpassed a valuation of $1 billion in 2019, which would mean that the company has steadily risen in value by about $1 billion per year over the past several years.

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‍Who Are Vinted’s Competitors?

Vinted’s main competitors include other online second-hand fashion marketplaces, such as Depop, Poshmark, Tradesy, thredUP, and The RealReal.

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Depop

Founded in 2011, three years after Vinted, Depop is a peer-to-peer social fashion selling platform that is quite similar to Vinted in many senses.

Like Vinted, Depop started as a way for people to buy and sell second-hand clothes. However, the platform has since evolved into a place where people can set up shops for their own brands as well.

What makes Depop’s business model different from Vinted’s business model is that Depop charges sellers a 10% commission on the total sale price of every item sold.

This 10% fee, known as the “Depop fee,” is the main way Depop makes money, and is in addition to standard transaction fees for payments made through PayPal (which is required to sell items).

Depop is headquartered in London, with additional offices in Manchester, New York, Los Angeles, and Sydney.

Poshmark

Poshmark is another social marketplace for buying and selling used clothing items. The company launched in 2011, the same year as Depop, in Redwood City (Silicon Valley). Poshmark also has offices in Vancouver, Melbourne, and Chennai.

Poshmark allows both buyers and sellers to create profiles and like, comment, and follow others on the social selling platform.

The platform is also known for its proprietary feature called “posh parties.” These are virtual shopping parties centered around certain themes or brands.

For example, there might be a Nike posh party where sellers who have Nike items can promote their goods and people interested in shopping for Nike apparel can buy them.

Poshmark has an even higher fee for sellers than Depop — the platform charges them 20% on all sales above $15, and a flat fee of $2.95 on any sale below $15.

Poshmark went public on January 14, 2021, with a valuation of $3 billion.

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Tradesy

Tradesy is a fashion resale marketplace built by women, for women. Founded in 2009 in Santa Monica, the platform focuses strictly on women’s apparel and accessories, such as bags, shoes, and clothing, from designer brands.

Tradesy charges sellers a flat fee of $7.50 for any sale under $50. Sellers pay a commission of 19.8% on all sales above $50.

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thredUP

San Francisco-based thredUP bills itself as an “online consignment and thrift store for your closet, your wallet, and the planet.”

Unlike other second-hand clothing marketplaces on this list, thredUP actually stores all the inventory they sell in warehouses across the US.

So, instead of sellers listing and shipping out their own items, they send bags of items to thredUP for selection and listing.

thredUP sorts through the apparel goods they receive and selects items they want to keep and sell. Sellers can pay to have unselected items returned, or else thredUP resells or recycles them.

The company then does all the work of taking photos, listing, and selling the items, charging commissions anywhere between 20% and 90% of the sale price. The more an item sells for, the less commission thredUP charges.

If items don’t sell within 60- or 90-day listing windows, sellers have to pay $5.99 to have them returned.

Like Poshmark, thredUp has been a publicly-traded company since 2021.

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The RealReal

The RealReal is a luxury consignment marketplace with both online and brick-and-mortar stores. The RealReal sells consigned clothing, fine jewelry, watches, fine art, and home decor.

All products sold by The RealReal are vetted and authenticated by the company’s team of luxury fashion authenticators, art curators, horologists, and gemologists.

The RealReal’s business model is similar to that of thredUP, in that they keep a smaller percentage of the cost of items that sell for more.

For example, the company keeps 45% and gives 55% of the price back to sellers on items that sell for up to $1,500. For more expensive items, such as fine watches, The RealReal pays sellers back up to 80% of the sale price.

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Wrapping Up on How Vinted Makes Money

Looking at Vinted’s business model is interesting because, as you can see from the descriptions above, it’s actually quite a bit different from their various competitors’ business models.

Whereas Vinted’s competitors charge sellers varying fees and commissions for selling their second-hand clothing and other items through the platforms, Vinted only makes money from sellers who pay to promote their listings.

Since we don’t have statistics on Vinted’s current revenue and profits, it’s hard to say for sure how this business model is working out for them. But the company has shown major growth over the last few years, which indicates that their unique business model may be working out.

Despite no indications that Vinted will go public any time soon, it will be interesting to see if it will follow in the footsteps of Poshmark and thredUP with an IPO in the years to come.