How Does Craigslist Make Money?

Craigslist

Craigslist is a very renowned and one of the most successful American classified advertisements website. Founded in 1995 by Craig Newmark, Craigslist has now become a professional advertising platform across the globe. According to Forbes, Craigslist has over 55 million monthly visitors and they have become a $3 Billion worth company. Craigslist doesn’t collect any commission or have any subscription fees yet they are a very successful company. So what’s the secret behind craigslist’s success and how they are generating revenue?

Craigslist generates most of its revenue from posting fees. Craigslist charges advertising fees from $3 to $75 in some selected categories. Craigslist website has separate sections which are devoted to jobs, housing for sale, items wanted, services, community service, gigs, resumes, etc. Craigslist charges a $25 fee to post a job listing in six major cities in the United States. Moreover, they charge a $10 fee to list an apartment rental in New York.

What Is Craigslist?

Craigslist is a region-specific online advertising platform where users can browses listings in various commercial categories as well as post their jobs and other listings for free or in some cases for small fees. All the listings in craigslist have contact information so if a user discovers a product or service they like then they can directly contact the person or company. Craigslist also has a separate discussion forum where users can discuss various topics. Craigslist is separated by geography so you can search for listing by city, state, and country. Initially, craigslist had a non-profit business model but in 1999 craigslist changed its business model into a for-profit enterprise.

Key Statistics Of Craigslist

1. Company: Craigslist, Inc.

2. Industry: Classified advertisements forum

3. Founder: Craig Newmark

4. CEO: Jim Buckmaster

5. Year founded: 1995

6. Headquarter: San Francisco, California, United States

Craigslist Business Model

Craigslist has a comprehensive business model and their business model is based on a P2P (peer-to-peer) or A2P (Agency-to-peer) or A2A (agency-to-agency) model. It means users on this platform can view advertisements according to district zones, region, state, or countries. Users visiting the website and interacting with the ads increase traffic flow to the Craigslist website. The more the traffic on the website the more revenue craigslist can generate. With lots of traffics, craigslist has a huge database that they can use for promotional purposes.

Craigslist provides geological locations based Ads so it ensures users will see ads based on “close-range proximity”. This system will help the users to avoid any misguiding ads or possible fraudulent activities that are a threat to an honest user. Moreover, users can also navigate to other regional locations based on ads from other areas that are not in “close-range proximity.”

To keep with the latest trends the craigslist developers have launched C- Plus application for craigslist users who use this platform more frequently. C- Plus is a 3rd party mobile app gateway to the original craigslist website. With this application, users can browse, search, and make a posting on Craigslist more conveniently.

How Craigslist Makes Money?

Craigslist makes money from the charges for posting ads. Their revenue is generated through a vast collection of classified sections. Though, craigslist only charges fees for selected categories, and users are charged with the following rates when uploading a listing on Craigslist:

1. Job postings in US and selected CA areas—$10-75 (fee varies by area)

2. Apartment rentals in Boston, Chicago, and NYC areas—$5

3. Commercial real estate in the US—$5

4. All for sale by-dealer categories in the US—$3-5

5. Cars/trucks by-dealer in the US, Vancouver BC—$5

6. Furniture by-dealer in Vancouver BC—$3

7. Cars/trucks, RVs, and motorcycles by-owner in the US—$5

8. Gigs in US and selected CA areas—$3-10

9. Services in the US and CA—$5 

Apart from the above fees, craigslist is completely free to use. So craigslist has a freemium business model and it helps them drive more users to the platform and make more money.

How To Post Ads On Craigslist

Anyone can post an ad on craigslist regardless of having an account on this platform or not. However, if you have an account on craigslist then you can easily retrieve, revise, or delete your posting. On the other hand, if you post ads without creating an account then you have to modify the ads via a link that you will find in your mail. Posting an ad on craigslist is very easy. Follow the below steps:

1. First, open a browser on your computer

2. Now visit the Craigslist website

3. Then click on the “create a posting” which is located at the upper left side

4. A new window will open; now click on the type of posting you prefer

5. Then click on the Continue button

6. Now choose your preferable category

7. Then fill up the ads posting form

8. A pop-up window will appear

9. Here you have to add images related to the ad posting

10. Then click on the “Done” to add the images

11. Finally, click on the “Publish” button to publish the ad

FAQs About How Craigslist Makes Money

1. How Much Money Is Craigslist Worth?

There is no exact data on how much money craigslist worth but it is estimated that craigslist is worth about $3 billion. Craigslist has an excellent business model with less overhead costs and they have only 50 employees.

2. Does Craigslist Take A Percentage Of What You Sell?

No, craigslist doesn’t take a percentage of what the user cell. Craigslist only charges a small number of fees for ad posting on some specific categories. Other than that craigslist is completely free to use.

3. Why Is Craigslist Bad?

Craigslist is not a bed but you have to be careful about the scammers, stalkers, and setups. Usually, scammers use craigslist to steal money from other innocent users by placing fraudulent advertisements with incredible deals. In this type of situation, buyers are asked to send money orders or checks online, and once the payment is done the scammer never sends the items.

4. Who Is The Current Owner Of Craigslist?

Currently, Craig Newmark and Jim Buckmaster are the owners of Craigslist. Craig Newmark is the founder of craigslist while Jim Buckmaster is the CEO of this company.

5. Does Anyone Use Craigslist Anymore In 2021?

Yes, craigslist is still a very popular online advertising platform in 2021 and they came in 8th in the 2021 Sellers Choice Awards. Moreover, the popularity and also the number of users of craigslist is increasing vary rapidly so it is a clear indication that people still using craigslist in 2021.

6. Is Selling On Craigslist Worth It?

Well, the answer to this question depends on what types of items you are trying to sell on craigslist. Usually, it takes time to sell products on craigslist and you have to answer queries, meet with potential buyers, and handle the final transaction. So if you are selling something small or have less value then craigslist is not the right place for you. However, if you are selling something valuable like furniture, jewelry, or designer clothing then it is worth spending time on craigslist.

7. Is It Better To Sell On eBay Or Craigslist?

Both, eBay and craigslist have their pros and cons. Craigslist has no fees to sell anything so you can collect maximum profit from craigslist. On the other hand, eBay charges a small number of fees from every sale. You can check eBay’s website for more information about fees.

8. Why does Craigslist Charge For Ads Now?

One of the main reasons craigslist charges for ads is to avoid spammers from posting ads and generate revenue to continue their business. Moreover, there are costs to maintain a website like craigslist so they charge fees to collect the maintenance costs.

9. When Did Craigslist Starts Charging A Fee To List A Car For Sale?

From April 15, 2019, craigslist starts charging a fee to list a car for sale. Since then craigslist started to charge a nominal $5 fee to list a vehicle for sale on the website.

10. When Did Craigslist Start Charging For Posting Jobs?

Craigslist started charging for posting jobs on November 1, 2016. At that time all cities and regions were allowed to publish job posting for a fee of $7.0.                         

Last Updated on June 10, 2021 by Musa D

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