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. This metric helps businesses understand key operational efficiencies, areas for improvement, and strategic opportunities to drive growth and user engagement.
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
Net Promoter Score (NPS)
A measure of customer loyalty and satisfaction based on user feedback.
Average Order Value (AOV)
The average value of orders placed on the platform.
Supplier Lifetime Value (SLV)
The projected revenue generated by a supplier over their tenure on the platform.
Repeat Purchase Ratio
The proportion of customers who make repeat purchases over a given period.
Customer Lifetime Value (CLV)
The projected revenue a customer will generate during their relationship with the business.