Ebay and Craiglist are the two dominant players that tap used but untouched goods in U.S. homes. These used goods have an estimated market of $381 billion. OLX’s co-founder, Alec Oxenford, two year back launched LetGo, a new startup. Its advanced features including geolocation listings and artificial intelligence brought revolution in the technology stagnant market.
Would LetGo be able to overpower Craiglist, the existing supergiant? How does it make money? The users often wonder. But before getting answers to these questions, it is important to study LetGo’s business model first.
LetGo – What is it?
LetGo is a user-friendly, free, digital classified platform that helps buying and selling used items locally. Used goods are traded at the forum, just like Craigslist and OLX. But, it is better. It offers image recognition technology, supports video listings, utilizes artificial intelligence, and has a better interface. Moreover, it is optimized for smartphones. All these features together make listing of the items at LetGo easy.
LetGo Business Model
OLX and LetGo share similar business and operating model. And Alec, the founder is to be credited for it! The used goods are bought and sold in over 35 countries via the mobile application, which is a simple digital classified.
As Alec says:
“Pollution and excessive resource consumption are world’s number one problem- putting life on the planet at risk and threatening the sustainability of the environment. LetGo helps to resolve this problem”Alec Oxenford, founder of LetGo
Alec wanted to monetize the company by capitalizing the network effect, a pattern that he adopted for OLX. The platform makes money through LetGo Pro and LetGo featured listings.
How does it Work?
The advertisements just like other classified platforms are listed in sections useful to the users. Based on the user’s preference and location, the platform utilizes geo-location technology, image recognition and artificial intelligence to list the advertisements.
The platform acts only as classifieds and not as a payment gateway, hence, the advertisements are listed in a 50-mile radius of the user. This increases chances of person to person exchange and transactions.
The actual exchange, however, takes place offline.
Putting up an item is easy at LetGo. It take less than 10 seconds, at least this is what the company claims. All you require is a picture of the item you wish to sell and the application. The application automatically sets the title and the category of your listing via artificial intelligence and image recognition.
LetGo is different from Craigslist for various reasons. Unlike Craigslist, LetGo only facilitates the trade of used items and not the services. The user-friendly platform sorts out the listings as per the distance and relevance of the user. And even what more exciting is, you post ads in every category and region free.
The marketplace further allows users to filter their searches. Based on the newness of the listing, price, distance and category, you can narrow your search and save your time.
Keeping in view, the best customer experiences, the platform has set up a chat option, which allows you to discuss your queries with the other party about the posted product.
How Does LetGo Makes Revenue?
How does a marketplace that is free and does not facilitate payments make money? That’s quite a common question among many of the users. The answer is, through featured listings and pro, the two premium features.
It is a suitable and a seamless strategy that has offered great business. The inclusion of advertisements (Google ads) is also one of the revenue-making strategy that the business has adopted.
The verified pro sellers, the auto-dealers specifically for whom this special feature is designed, avail special benefits at LetGo Pro
- Listing a car on letgo automatically is easy with major feeds integration
- The app allows the dealers to get phone numbers and calls from the buyers
Dealers with up to 30 vehicles can sign up for the pro membership for $99 only.
This premium feature draws more attention by placing the listed item above the organic results. As the company claims, featured products receiver higher viewership than the non-featured products.
Complying with its principle of keeping things as relevant as possible, the company doesn’t offer it to every user. The feature is still in its beta version.
Google Ads in LetGo Business Model
The company chooses to work with partners who works with ad partners and Google to act as ad mediator and ad supplier for the website.
The web-pages displays the contents of these ads. These ads work closely with the OLX website. The different pages of the website carry different number of Ad units.
Craigslist with nearly 55 million monthly users is the leader of the digital classified market, yet, it lacks innovation, the basic need for survival in the technology industry.
The lists on Craigslist are updated using the same time chronology. It hasn’t changed its interface since 1995 nor launched its mobile application.
On the other hand, LetGo, is a mobile-friendly classifieds application that has brought a revolution with its artificial intelligence based features.
Unlike Craigslist, where the parties contact each other via emails, LetGo has a better option. The parties on LetGo connect with each other via live chat. Moreover, the results are more relevant, the searches are filtered.
LetGo has recently raised $100 million at a $1B+ valuation. With over 75 million downloads, it has become one of the fastest growing applications in the U.S.
An effective growth strategy and backing by high profile investors signify a promising future of the app. The app also generates plenty of revenue for its shareholders. LetGo’s in-app purchases ranging from $0.99-$44.99 offer variety of income levels and spending habits.
Moreover, the app also offers special features to offer enhanced experienced to its users.
All in all, LetGo business model has helped the app to increase the brand awareness in its primitive stages. Furthermore, it has acquired wide usage of the app.
Planning to do a local yet virtual business of used items? LetGo is your place to go!