How does Craigslist Make Money – Unicornomy.com Analysis
How does Craigslist make money is a question that almost all newbies on craigslist have. Well, it is one of those internet players (older internet players) who survived the dot com burst and made it out strong. The underlying principle was simple – give people of the 90s a platform or a medium to advertise their stuff for sale, gigs, books etc. for a fee and get lakhs and millions of other people to view those ads and give the advertiser some monetary advantage.
Craigslist is one of the earliest Classified Websites and follow a simplistic approach with respect to the UI/ UX of the site and the overall appearance of the website. It is a privately owned company and with bare minimum staff as required. The business model of Craigslist is pretty simple as most of the postings are free but in some specific areas about some niche services.
OLX was started as an alternative to Craigslist for people outside the USA since Craigslist was only operational in the USA, it never really got the chance to see the big market outside the USA. Read more about OLX business model here.
How does Craigslist make Money
Craigslist is free for most users who post buy/sell ads and other listings. Some listings in specific areas are paid which are listed down as follows:
- Job postings in selected areas — $15 – $75 (fee varies by area): When someone tries to use Craigslist to get responses for a Job Opening, they pay 15 to 75 dollars per listing depending on the location of posting
- Brokered apartment rentals in New York City area—$10: When someone posts for an apartment being offered on rent, they pay 10 Dollar only if the apartment is in NYC
- Therapeutic services in the United States—$10 (reposts of live ads $5): Someone offering these services to patients pays 10 Dollar on every fresh listing and 5 dollars on every time the listing is refreshed
- Tickets by dealer in the United States—$5: Event tickets by dealers are charged 5 dollars per event
- Cars/trucks by dealers in the United States—$5: Very Popular people usually use Craigslist to find used cars for purchase, Craigslist charges 5 Dollar to the seller of the vehicle to post ads pertaining to sell their vehicle.
Adult Ads (Escorts etc.): People offering these services were charged for every ad, but this had to discontinued as this resembled promoting prostitution
Business Model of Craigslist
The business model is pretty straightforward, they invest in setting up the infrastructure (hosting, servers etc), making sure they appear in search results for requirement keywords (car on sale in NYC etc), thus ensuring they have sufficient number of page views every day so that sellers and promoters have enough visibility so that Craigslist can charge the advertisers for the ulterior monetary benefit.
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