- How does Craigslist make money with free services?
- Get the breakdown of the business model of Craigslist.
- Review the competitors and future growth engine of Craigslist.
Founded by Craig Newmark, Craigslist is a classified advertisements company that began its services as an email distribution platform in 1995.
What started as a curated list of San Francisco social events has now become one of the leading classified ads platforms in the world, operating in over 80 countries.
A year after its founding, Craigslist transitioned to the web. Since then, the product portfolio of Craigslist has expanded considerably.
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What does Craigslist do?
Craigslist is a classified advertisement platform divided into various sections. The platform allows you to post ads of different categories, including jobs, housing, services, community, and personal. You can use the platform to post, find, and respond to ads. Craigslist facilitates safe interaction between users. Here’s what you can do on the platform:
Post ads
You can post different types of ads on Craigslist which will then appear in their dedicated sections. The platform allows you to post ads regardless of whether or not you have a Craigslist. However, you can get easy access to everything you post if you have a Craigslist account. If you do not have an account, you will receive an email every time the ad needs to be modified.
Find ads
You can browse through ads posted on Craigslist. All you have to do is select your location from the Craigslist page. Once you have entered your location, you can explore relevant ads organized under different sections. The main sections are further divided into subcategories so that you can easily filter the content based on what you are looking for.
Respond to ads
Craigslist allows you to respond directly to ads. The platform facilitates direct transactions and negotiations between buyers and sellers. Each ad posted on Craigslist has a ‘Reply’ button in the upper left corner. You can click on this button to see contact methods given by the poster.
Despite facilitating direct negotiations, Craigslist provides 100% security by masking the seller’s email address as Craigslist’s email address. The platform automatically forwards each mail sent to that address to the seller's personal email address. However, users can choose whether or not they want their email to be masked as a Craigslist email.
How does Craigslist work?
Craigslist is an online platform that allows you to post and see local ads. It works very much like the classifieds section of a newspaper. From jobs to apartments to personal ads, to garage sales, you can find a wide range of ads on Craigslist. These ads appear under a variety of categories. The key areas found on the homepage of Craigslist include community, housing, services, for sale, jobs, and discussion forums.
Community
This section incorporates events happening in the community, such as classes, local news, political forums, etc. The section has a sub-section "Rants & Raves," where users can share their thoughts and feelings.
Services
In this section you will find people or businesses offering different services, such as wall painting, baby-sitting, car repair, plumbing, etc.
Housing
This section is dedicated to rental listing ads. You can use this section to find or advertise rental properties, such as rooms, houses, apartments, etc. This section also incorporates real estate listings for buying, selling, renting, or trading.
Jobs
This section is dedicated to job postings. You can find listings for all fields in this section, including real estate, accounting, writing, media, and education among others.
For sale
If you are looking to buy low-priced items, you can use this section to buy anything from crockery to furniture.
Discussion forums
The platform also features forums for discussions related to almost everything, such as religion, politics, society, law, and products among many other topics.
How does Craigslist make money?
Craigslist makes money through paid advertisements, search engine advertisements, and Craigslist TV. Here’s how Craigslist generates revenue:
Paid advertisement/paid listings
While most of Craigslist’s service is free, it charges $25 to give increased visibility to your ad on the platform. Craigslist charges $25 for job-related ads and several other listing categories. Most of Craigslist’s revenue comes from paid listings where the ads are optimized to appear in certain search results.
Craigslist TV
Craigslist also generates revenue through its YouTube channel named Craigslist TV. The company uploads videos related to different topics and showcases ads through those videos. The ad appears either at the start of the video or at the bottom of the video during an interval.
Search engine advertisements
Craigslist also makes money through search engine advertisements. These ads are displayed in a few categories, allowing users to focus attention on their product or service.
Documentaries
Craigslist has started a documentary film. The platform charges users for its soundtrack and DVD prints.
Future growth engine
Craigslist does not have a strictly defined business model. The company aims to provide top-grade services to its users while ensuring their safety. The platform focuses more on content than design.
In the past, Craigslist has stayed away from massive advertisements and relies on its diverse product portfolio to gain dominance in the market. One of the hypotheses as to how the company plans to grow in the future is its ideology to disregard typical rules of business, such as continuous innovation and design improvement.
Competitors
The leading competitors of Craigslist e-commerce sites and online platforms that display ads.
- eBay Classifieds
- Facebook Marketplace
- Poshmark
- Apartments.com
- Indeed.com
- Match.com
- Zillow
- Carvana
- Upwork
