How Does Online Buy-Sell Marketplace Like Letgo Make Money?
A few popular applications in this sector are Letgo, OfferUp, eBay, Craigslist, and more. Out of all those, Letgo became the most used app in recent times.
The users of Letgo said that they are so dazzled and comfortable with the features provided by Letgo. By the fact that Letgo made up to $1.5 billion in the first three years of its launch. Many
startup enablers and entrepreneurs are always delicate to know more and more about the working of Letgo.
Therefore, in this blog, let’s explore how an online buy-sell marketplace like Letgo makes money and its business model. So, let’s proceed first with a buy-sell platform like Letgo's Business Model.
Business Model of Online Buy-Sell Marketplace Like Letgo:
Letgo is an online classified marketplace through which you can effectively buy or sell products. As it were, the business model of Letgo is quite similar to that of OLX. This mobile app is available in over 35 countries around the world. With more than 20 million users, the organization accompanies two advanced features that are “ Letgo Pro and Letgo featured listings”.
The most awesome aspect of the Letgo Business Model is that it utilizes geo-location, image recognition, and artificial intelligence. This product listing is completely based on the user's location and preference. The ads are typically listed that come under the 50 miles radius of the users. As the actual exchange will occur in the offline mode. Users can effectively apply the filter based on location, distance, category, freshness, price, and more.
How Does Letgo Make Money?
In this way, now comes the primary concern, how an online buy-sell marketplace like Letgo makes money. We as a whole know that Letgo is a free marketplace platform where users can effectively advertise their products. Still, Lego has six major revenue models for its business.
Ad base model (On-Platform Advertising)
A freemium model
Two subscription plans
In-App Purchases
Transaction Fee
Commission
Let’s explore all of them one by one.
1. Ad base Model
The ad-based model was a triumph for Letgo in a short span of time and it even assisted Letgo to increase the number of users. Online marketplace platforms generally accompany various benefits for advertisers which attracts them to such platforms. Hence, marketplaces like Letgo exploited this and launched an ad-based model.
The application or website users will see a lot of banner ads and when the users get drawn to such advertisements Letgo will procure revenue. The more users get engaged in these banner ads, the more revenue will be procured by Letgo.
Users generally love the things which are free, so placing such advertisements on the platform never results in losing users. As the users don’t need to pay anything for these ads.
2. A Freemium Model
The freemium model of the online buy-sell marketplace like Letgo is for all those product owners who need to list their products on the top. The Letgo freemium model accompanies a feature called the “ bump up ” and featured listing. The “bump up” feature will allow the users to list their product on the top positions for approximately 7 days in a row. The product owner even has a feature to attract users with the sale.
Letgo clone will charge the product owners fees ranging from $0.99 to $3.99 which relies upon the product. An ever-increasing number of users on Letgo are attracted by this feature, as it allows them to play safely. This way, Letgo procures revenue from the Freemium model.
3. Two Subscription Plans
Online buy-sell marketplace like Letgo comes with two subscription plans for their users.
The Super Boost Mode
At the point when a user subscribes to super-boost mode, one of the products consistently will remain in the featured list automatically by the system. Letgo will gather the information on products in the marketplace and will accordingly show it in the featured list.
So, the product with the highest probability to be sold will be displayed in the featured list.
The Letgo Pro plan
This subscription plan is uniquely made accessible for car dealers. The fundamental point of this plan is to provide more leads to car dealers. The pricing plan for the Letgo pro subscription plan goes like $99 for 30 vehicles, $399, and $599 for 70 and 150 vehicles respectively. These plans are on a monthly basis. It even accompanies a 30-day free trial.
4. In-App purchases
Instead of generating income from app downloads or sales, an online buy-sell marketplace like Letgo offers an in-app purchases feature. With this users can purchase to draw attention to their listings and sell their products quickly.
For example, users can pay to ‘feature‘ a listing, which will place the listing at the top of the user's feeds and highlight it with a unique ‘Featured’ ribbon.
It will also add a button that allows the buyers to contact the seller with a single tap without any problem. Sellers have the option to feature their product listing for 24 hours, 3 days, or 7 days.
In this way, while the core of the app’s functionality -buying & selling - is free, users have various chances to pay for special features that will improve their experience on the app.
Again, this revenue model is a clever way to procure the wide utilization of the app and increase brand awareness in the early stages of the business, as customers are considerably more likely to try something out when it’s free.
5. Transaction Fees
Every online buy-sell marketplace uses this approach to make revenue. Here you charge a fee from the buyers to facilitate a smooth exchange of goods and services on the platform. The charge extracted is known as the Transaction fee.
You can set a fixed amount as a transaction fee or decide on a specific percentage you would like to keep for every exchange amount.
6. Commission
Seller fees and transaction fees are indistinguishable, with the only distinction being that it is sellers who pay them. This is a very common and fundamental method followed by most marketplaces.
A significant amount of fee is charged as a commission with all sellers and the fee needs to be paid on each sale transaction. The commission percentage can be haggled with the seller at the time of their registration.
Wrapping Up
By this blog, you are clear with the business and revenue model of an online buy-sell marketplace like Letgo. Owning such a marketplace platform helps you to acquire benefits in the form of seller transactions and subscription charges.
Apart from the revenue aspects, a marketplace lets you reach many users (sellers and buyers) from around the world.
However, you can only enjoy these perks when your app is parred excellence and so convenient. Furthermore, the main way you can ensure is by going to the right app development team!
Comments
Post a Comment