What is Buyer-Seller Ratio, and how do you calculate it?
In short – Ratio of active buyers to active sellers. A key marketplace metrics you should track.
Buyer-Seller Ratio Formula
Buyer-Seller Ratio = Number of Active Buyers ÷ Number of Active Sellers
Buyer-Seller Ratio provides insight into the balance between supply and demand on the marketplace. An optimal ratio ensures sufficient choice for buyers and enough demand for sellers.
Imbalances can lead to issues like unsold inventory or lack of product variety. Monitoring this ratio helps in strategic planning for user acquisition.
How can you find your Buyer-Seller Ratio?
You should generally be able to calculate your Buyer-Seller Ratio with tools you already posess. If that's not the case, signing up for an analytics tool may make sense.
Among others, twosided is one of the tools you could consider. Out-of-the-box, you'll get over two dozens marketplace KPIs and detailed tracking for your supply, demand and other factors that determine marketplace health.
Explore other metrics
Order Frequency
Average number of orders placed by a buyer within a specific period
Cross-Sell Rate
Percentage of transactions that include additional products or services
Supply-Demand Ratio
Ratio of available listings to active buyers
Listing Quality Score
A metric evaluating the quality of product listings based on predefined criteria
User Net Adds
Net increase in the number of users over a specific period