How does Craigslist Make Money?

What can be a one-stop solution for people to visit, sell and buy online?

You don’t need to require much time to research. Craigslist is leading classifieds market. There are over 50 billion viewers every month. It was founded in 1995. Initial days, Craigslist doesn’t expect any product. But after 1999, the business has transformed itself as a profit organization. Craigslist has started it’s earning with “Email Distribution List” in the year 1995. It made reach to billion people across the globe. With effective word-of-mouth marketing, it still posited itself as the best classified in the market.

How does Craigslist Work?

Craigslist works as other classifieds platforms in the market. It operates by listing the advertisement according to the relevancy. Consider, if a person is from Canada, they can look for ads related to Canada only. Keeping it simple, these advertisements are listed depending upon the user’s region and differentiate the category in order to avoid confusion. Relevant ads are displayed for every user.

Nowadays, classified advertisements have earned good fame in the market. It’s no secret that there are no newspaper ads. People are not using the newspaper to get the information. Therefore advertisements on popular platforms such as craigslist can be advantageous. These ads have a longer life, searchable and location-based ads. The ad can be accessed by worldwide users. Within a few simple clicks, users can access your ad. On top of everything, advertisements on Craigslist are free. An advertiser can easily target or modify their ads according to their requirements.

Sounds interesting!!! If the Craigslist doesn’t charge for the advertisement, then how it is making money?

Let’s dig into the topic!!!

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How does Craigslist make money?

Well, Craigslist has a “Peace” symbol as the logo. The business started earning profits for certain categories in 1998. It means, Craigslist postings are almost free, but charges for few.

  • Job postings in selected cities – $7 to $75
  • Dealer categories in the United States – $3 to $5
  • Vehicles dealers in the United States and Vancouver BC – $5
  • Furniture dealers – $3
  • Therapeutics service in the United States – $10

However, this has become the best strategy for Craigslist to earn money. There are millions of people who listed their advertisements.

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Peer to Peer Interaction

Craigslist business model is completely based on the peer-to-peer model. Sometimes, it is also identified as an agency-to-agency model. This means anybody can view or access your advertisements on the platform. No matter whether they’re residents of the UK or US.

The effective interaction between customer and community help to build a potential channel that improves the Craigslist website traffic. In fact, traffic was increased due to word-of-mouth marketing and other references. Successfully, a great revenue is generated from Craigslist database. The information in the database is used for various promotional purposes.

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Potential income streams

Craigslist is earning profits with other streams. Let’s discuss them, the platform charge for banner ads and other Google text ads. It is giving an advertiser a chance to promote their ad effectively. An advertiser can create an attractive banner and display on Craigslist. It’s obvious, the customer gets attract and purchase in less time. For example, if you’re planning to sell a vehicle, create a banner with your vehicle.

 Though, Craigslist doesn’t like to charge for advertisement because the founder is fear about the quality of the website. But, the founder “Jim Buckmaster” has identified there is a great earning for job listings. Thus, promoting banner ads and text ads can bring immense profits to grow the company.

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Geological Locations based Ads

Craigslist is popular to display the ads depending on the user location. The platform is specially designed to serve users with “close-range-proximity”. It means that users can browse or search the ads that are available near their location. This help user to get rid of spammers and misleading promises.

Users at Craigslist have an option to navigate from one regional location to another. They can review ads from other regions as well. It’s all their choice, if they want to review other location ads, they can do it by navigating their location.

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C-Plus for smart devices – Mobile, Tablet

Is there anybody without a mobile phone? Of course no. People of all age groups are using mobile phone for various reasons. As the mobile users are increasing day-by-day, Craigslist has introduced C- Plus mobile app in the market. C- Plus is giving a tight competition to other platforms such as OfferUp and Letgo. C- Plus is a third-party application gateway to the official Craigslist website. Craigslist has developed a user-friendly mobile application for users to access, search, browse and perform posting at fingertips. Since there are millions of mobile users, people are switching to C-Plus app to post their ads.

C-Plus application is helping users across the globe with daily posting and transaction. Also, C-Plus has generated good revenue for its business.

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How much is Craigslist worth?

Craigslist is a leading private company. It has never raised a single dollar from investors. Therefore, Craigslist worth can be estimated. However, according to a recent analysis, Craigslist generated $1 billion in revenue annually. It’s no surprise that Craigslist is the profitable classified platform around the globe. The platform works on – network first and profit later. This is the success strategy for Craigslist to earn money. There are few popular websites such as Facebook and WhatsApp have implemented this strategy and reach top-level.

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Conclusion

Craigslist is a leading American classified advertisements platform. The platform has over 80 million U.S users with 50 billion views every month. Many people across the globe choose Craigslist to promote themselves.  The website has divided into multiple sections that are devoted to advertisers promotions – jobs, housing, for sale, vehicles for sale, latest products, items wanted, new services, community service, etc. Craigslist makes money by posting these type of ads on their website. The platform is earning money through banner ads and text ads. On the other hand, with the introduction of C-Plus, the revenue got doubled for Craigslist.

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