Definitions for the key terms used across marketplace building. Mostly written so a non-technical founder can read this once and stop pretending to understand a word that sounds important on a Stripe API page.
The percentage of each sale that the marketplace owner keeps. Also called the take rate. Set per marketplace (and optionally per subscription tier). Typical ranges: 5 to 10% for high-volume low-margin goods, 10 to 15% for standard product marketplaces, 15 to 20% for service marketplaces, 20 to 30% for premium services. Etsy charges around 6.5%, Airbnb around 15%, Uber around 25%.
See also: Marketplace commission rates · Revenue calculator
Synonym for commission. The percentage of GMV the marketplace owner captures. "Take rate" is more common in investor and analyst contexts; "commission" is more common in operator contexts. Same thing.
The total dollar value of all transactions on the marketplace, before any fees or commissions. If sellers move $100,000 of goods this month, your GMV is $100,000 regardless of what you take. The standard top-line metric for marketplace size. Your revenue is a function of GMV × take rate.
See also: Revenue projections by GMV
Stripe's technical term for the commission the marketplace platform takes on each payment. When you set up Stripe Connect with destination charges, the application fee is the percentage automatically routed to your platform account at the moment of payment. Your commission rate translates directly into the application_fee_amount parameter on the Stripe API.
See also: Stripe for Marketplaces guide
The transfer of funds from a seller's Stripe balance to their connected bank account. Stripe handles payouts on a schedule (typically 2 business days in the US, longer in other regions). The marketplace owner doesn't manually move money. Payouts only happen after the seller completes KYC verification.
Monthly Recurring Revenue from seller subscriptions. The total monthly subscription fees you collect from sellers across all paid plans. On a marketplace with 50 sellers on a $49/mo Pro tier, subscription MRR is $2,450/mo. Tracked separately from commission revenue because the two flow through different Stripe accounts (regular Stripe vs Stripe Connect).
See also: Subscriptions feature · Subscription revenue model
Funds held by the platform between payment and release to the seller, typically pending delivery confirmation or a return window. On Prometora, shipping orders defer seller payout until the seller marks the order as shipped, and booking marketplaces can hold the seller's share until the session is over (payout after completion). Both act as a soft form of escrow without requiring a true escrow account. True regulated escrow is rare in marketplaces.
See also: Shipping & deferred payout · Booking payout after completion
A fee the buyer pays on top of the item price, kept by the marketplace. The way Vinted charges its buyer protection fee. Lets you split your take between both sides (5% from the seller, 5% from the buyer) or make selling free and earn from buyers only. Shown to the buyer before they pay, never part of the seller's payout, and not counted in GMV.
See also: Buyer service fee setup
Extra safeguards that switch on only above an order amount you set, for marketplaces where a single sale can be worth hundreds or thousands. On Prometora that means a buyer fee charged only on orders above the limit, and shipping labels held by you until you release them to the seller, so an expensive item never ships before you have looked at the order. The seller's shipping deadline pauses while a label is held.
See also: Order value limit & held labels · Fee only above an amount
When a buyer asks their bank to reverse a card payment instead of asking you for a refund. Stripe takes the disputed amount out of the balance while the bank decides, and you submit evidence (order details, shipping proof, messages) to contest it. One dispute is normal; a high dispute rate puts the Stripe account at risk. Clear listings, fast replies and tracked shipping prevent most of them.
See also: Handling disputes
Stripe's product for platforms and marketplaces that move money between multiple parties. Handles payment splitting (buyer → seller, with platform taking a cut), seller verification (KYC), payouts, and tax reporting. Different from regular Stripe (which is for one business collecting payments). All multi-vendor marketplaces on Prometora use Stripe Connect.
See also: Complete Stripe for Marketplaces guide · Stripe Connect setup
Three flavors of Stripe Connect accounts in the v1 API. Standard: seller manages a full Stripe dashboard themselves. Express: simplified onboarding hosted by Stripe; most v1 marketplaces pick this. Custom: maximum control, requires a dedicated payments engineering team. In late 2025 Stripe shipped Accounts v2, which replaces these fixed types with flexible configurations. Prometora moved to v2 in May 2026 and provisions sellers with dashboard: "none" + embedded components - the modern equivalent of Express but with the entire seller experience inside the marketplace site, not on Stripe.
See also: Which account type to choose
The December 2025 rebuild of Stripe Connect that replaces the fixed Standard / Express / Custom account types with composable configurations: independent dashboard, configuration, and responsibilities settings you combine to get the exact behavior you want (see Stripe's connected account configuration docs). Prometora migrated to v2 in May 2026 and provisions every new seller with dashboard: "none" plus embedded components, so the seller's entire payment experience lives inside the marketplace rather than on Stripe.
See also: How sellers connect Stripe
Stripe's prebuilt UI blocks - onboarding, payouts, balances, transactions, account management, tax documents, and an action-required notification banner - that mount inline inside your own site through a Stripe-hosted iframe. The seller never leaves your marketplace and never sees a Stripe-branded page, while Stripe still handles all the sensitive KYC and compliance behind the iframe. These are what make Prometora's white-label seller experience possible.
See also: How sellers connect Stripe
The identity-verification process every seller must complete before receiving payouts. Stripe collects legal name, DOB, address, tax ID, and bank account from each seller. Required by financial regulations. Cannot be skipped (though it can be deferred until the seller has actual earnings waiting).
A pattern where sellers can list and sell on the marketplace BEFORE completing full Stripe verification. Earnings are tracked and held until the seller verifies, at which point accumulated funds are paid out automatically. Dramatically improves seller retention because verification happens when there's real money waiting, not at signup when the seller is still evaluating the platform.
Where the money sits. During the deferred window the funds are custodied by Stripe (a licensed payment / e-money institution), not by the marketplace in its own bank account. They rest in the platform's Stripe balance and are attributed to the seller in the marketplace's own records (the seller's pending-earnings balance), then released to the seller's connected account with a Stripe transfer once verification completes. The marketplace can only move these funds along Stripe's rails; it never gains free use of them.
Regulatory note (EU / EEA). Under PSD2, only parties that never come into possession or control of user funds are exempt from being regulated as a payment institution. Because the deferred window briefly holds and directs seller funds, EU/EEA operators should confirm their position with Stripe and local payments counsel before relying on it. The usual basis is that Stripe is the licensed fund-holder and the platform never takes funds into its own account, but the "control" question is jurisdiction-specific and is best cleared up front rather than assumed.
See also: How sellers connect Stripe · Deferred onboarding deep dive
The party that builds and operates the marketplace platform. Sets the commission rate, curates sellers, drives buyer traffic, handles disputes. Etsy Inc. is the marketplace owner of Etsy. Airbnb Inc. is the marketplace owner of Airbnb. On Prometora, this is you.
A party that lists products or services on the marketplace and receives payment from buyers (minus the platform's commission). Sellers have their own dashboards, storefronts, and connected Stripe accounts. Used interchangeably with "vendor" (more common in B2B and wholesale contexts).
A party that purchases from a seller through the marketplace. Pays the marketplace at checkout; funds are split automatically between platform commission, payment processing fees, and the seller's connected Stripe account.
A seller whose account and listings are created BY the marketplace owner on their behalf, rather than through self-serve signup. Used for high-touch marketplaces where vendors are non-technical and need help getting set up. The seller still verifies their own Stripe account later to receive payouts.
See also: Managed Sellers feature
A platform that connects two distinct user groups whose value to each other grows with participation. Buyers need sellers, sellers need buyers. All multi-vendor marketplaces are two-sided. The defining challenge is the cold-start (or chicken-and-egg) problem: neither side joins until the other side is already there.
See also: 15 strategies to solve the cold start
A marketplace where many independent sellers list and sell their own products or services. The platform doesn't own inventory. Etsy, eBay, Amazon Marketplace, Reverb, StockX, Faire are all multi-vendor. Defining technical features: per-seller storefronts, split payments via Stripe Connect, per-seller payouts.
See also: Multi-vendor marketplace builder · How to build one
A marketplace where sellers offer services (not physical goods). Rover (pet sitting), Thumbtack (home services), Fiverr (freelance work), Care.com (caregiving). Usually involves scheduling, location-based search, and reviews of providers. Higher commission rates than product marketplaces (15 to 25% typical).
See also: Service marketplace builder
A marketplace where sellers rent assets to buyers for a defined time window. Airbnb (homes), Turo (cars), Fat Llama (peer-to-peer equipment). Defining technical needs: calendar availability, time-based pricing, iCal sync to prevent double bookings, deposit handling.
See also: Rental marketplace builder · iCal calendar sync
A marketplace where business buyers purchase from business sellers. Faire (wholesale to boutiques), Alibaba (international wholesale), Knowde (specialty chemicals). Defining needs: seller approval workflows, custom business fields (VAT, MOQ, lead time), NET payment terms, RFQ (request for quote) flows. Vertical B2B (one industry) typically beats horizontal B2B.
See also: B2B marketplace builder
A marketplace where the same people are both buyers and sellers. Vinted, Craigslist, Facebook Marketplace, skill-swap and classified sites. The big advantage is that you only have to recruit one kind of user, which is why P2P models sidestep most of the chicken-and-egg problem. The catch: trust between strangers, and the biggest incumbents of any marketplace type.
See also: When the chicken is also the egg
The bootstrapping challenge in two-sided marketplaces: sellers won't join without buyers, buyers won't join without sellers. Solved by picking one side to subsidize, going hyper-local, faking the supply side manually, or piggy-backing on an existing community. Most marketplace failures fail here, not on the technology.
See also: 15 proven strategies
Synonym for the chicken-and-egg problem, used more in tech and investor contexts. Popularized by Andrew Chen's book The Cold Start Problem. Refers to the difficulty of getting a network or marketplace off the ground when its value depends on participation it doesn't yet have.
The phenomenon where each additional user makes the marketplace more valuable to every other user. More sellers attract more buyers, who attract more sellers. Once a marketplace reaches critical mass in a niche, network effects make it very hard for competitors to displace. The reason marketplaces are winner-take-most businesses inside any single category.
The point where a buyer who searches finds something to buy, and a seller who lists makes a sale within a reasonable time. The real meaning of a marketplace feeling "full". It is local to a category and a place: ten cleaners in one town is liquid, a hundred spread over a country is not. Measure it as the share of searches that end in a purchase and the share of listings that sell.
See also: Marketplace marketing guide
The two groups every marketplace has to recruit. Supply is whoever lists: sellers, hosts, providers, coaches. Demand is whoever pays: buyers, guests, clients. Almost every marketplace should recruit supply first, because listings are what buyers come for, and a page with listings can be marketed while an empty one cannot. Job boards and request-driven sites are the usual exceptions, where demand pulls supply.
See also: Focus on one side first
An HTTP POST that the marketplace platform sends to a URL you control whenever a specific event happens (new order, refund, seller verification complete, etc.). Lets you sync marketplace data to your own systems (CRM, ERP, analytics, accounting). Business plan feature on Prometora.
See also: Webhooks setup
A standard calendar format (RFC 5545) used to share availability between rental platforms. A seller on Airbnb AND your marketplace can sync calendars in both directions so a booking on one platform blocks the same dates on the other. Prevents double bookings without requiring a custom integration with each platform.
See also: iCal sync setup
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