Understand The Long-Term Value Of Each Vendor On Your Marketplace
WC Vendors Marketplace
Vendor Lifetime Value Calculator
Revenue tells you what you made today; Lifetime Value (LTV) tells you the health of your business.
Discover the true value of your vendor relationships.
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Why You Need This Calculator
LTV reframes every growth decision. If a vendor is worth $600 over their lifetime, spending $80 to acquire one through ads is an obvious win — but if you only looked at the first month's $25 fee, you'd wrongly conclude that ad spend is a loss. This single number is the difference between confidently scaling your marketing and nervously second-guessing it.
It also makes the case for retention crystal clear. Because lifetime value is driven by how long vendors stay, even a small improvement in vendor lifespan can dramatically increase what every vendor is worth — often a far cheaper path to growth than constantly chasing new signups.
How This Calculator Works
Vendor lifetime value is the monthly fee multiplied by how many months the average vendor stays.
When To Use This Calculator
- When setting your marketing budget — Use LTV to decide how much you can profitably spend to acquire each new vendor.
- When evaluating retention efforts — See how much extra revenue you’d earn by keeping vendors just a few months longer, and decide whether retention features are worth the investment.
- When measuring marketplace health — A rising lifetime value signals happy, loyal vendors; a falling one is an early warning sign of churn.
- When pricing your memberships — Understand how price and lifespan combine, so you don’t win on price but lose on loyalty.
- When reporting to stakeholders — LTV is a core business metric that demonstrates the long-term value of your marketplace far better than monthly revenue alone.
Frequently Asked Questions
Vendor lifetime value (LTV) is the total revenue an average vendor generates for your marketplace across their entire time as a paying member — not just their first payment.
Multiply your average monthly membership price by the average number of months a vendor stays subscribed. For example, $25/month × 18 months = $450.
Monthly revenue is a snapshot; lifetime value reflects the long-term health of your business. It tells you what a vendor is truly worth, which is essential for deciding how much to spend acquiring and retaining them.
Look at how long your vendors typically stay before canceling. If your marketplace is new, estimate conservatively — you can refine the number as you gather real retention data.
Either raise your membership price or, more powerfully, increase how long vendors stay — through better onboarding, responsive support, valuable features, and a marketplace that helps vendors sell more.
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