Higher AOV drives Faire margins

The margin gap says more about transaction shape than fee rate. Faire processes fewer, much larger orders, so one support touch, one payment flow, and one underwriting decision can cover a $1,000 wholesale basket instead of many small consumer checkouts. That lets payment costs, trust and safety work, and customer support stay a smaller share of revenue than at Etsy, even when both businesses are marketplace led.

• Faire’s order economics are unusually favorable for a marketplace. On a modeled $1,000 order, it takes roughly $174 in commission and payment fees, then gives back only about $30 in cost of goods sold, leaving about $127 net. That implies 73% to 75% gross margin per order because the dollar spread on each order is large.
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• Etsy’s reported 2023 gross margin was about 69.8%, with $1.92B of gross profit on $2.75B of revenue. Etsy also said cost of revenue rose from cloud hosting and bandwidth, payment processing, refunds under purchase protection, and customer support investments. Those are the natural costs of serving a high volume B2C marketplace with many smaller transactions and more buyer side disputes.
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• The workflow is different as well. In B2B wholesale, buyers reorder inventory in bigger batches, often with recurring vendor relationships, and marketplaces can expand into payments, invoicing, credit terms, and purchasing software around that order flow. In B2C, the marketplace has to win millions of individual shopping sessions one by one through search, recommendations, trust features, and consumer support.
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The next margin lever for Faire is not just more GMV, but more of the retailer workflow. If wholesale ordering, payments, net terms, and inventory tools keep moving into one system, Faire can turn each retailer relationship into a higher revenue, lower friction account. That pushes the business further away from consumer marketplace economics and toward a denser, more software like B2B platform.