How E-commerce site Make Money

Everyone wants an extra income to meet their needs and upkeep their standard of living. Furthermore, buying and selling of goods and services via the Internet is the new trend to earn money. Such websites are called E-commerce websites. E-commerce websites are offering a free platform to the sellers and the buyers to get in touch with each other. One can easily list their products on e-commerce websites and potential buyers can buy the products hassle-free sitting in any part of the world.  The whole online buying and selling chain appears to be a very easy and economical process. Although, you must have wondered as they offer free services to the sellers and buyers then how these e-commerce websites like OLX, Quikr, Craigslist, and Gumtree make money online?

E-commerce websites, such as OLX, Quikr, and other leading sites provide an online portal to advertise your product or service offerings and find the buyer for them. Almost all the emerging e-commerce websites offer free services to the users. However, they still make high tech TV commercials and disburse a lucrative salary to their employees. How?

So, let’s get the answer by analyzing the revenue generating strategies of a few leading e-commerce websites and comparing their revenue plan with others.

OLX

OLX is a popular and very well structural platform e-commerce website, where one can directly sell their products to the buyer of their own choice. It offers a variety of features to their users, such as sellers can directly chat with a buyer, can easily bargain etc. OLX was competing with eBay India prior to its acquisition. Currently, OLX is one of the highly profitable company. OLX opts following methods to earn money:

  • GOOGLE ADSENSE BANNER ADS

Google offers to all bloggers and website owners a very easy platform to get the advertisements on their site. Google AdSense is a platform where you can register your website and after verification, Google will show related advertisements. OLX uses two Google ad units, one that is persistent throughout on the left side of the site and one right before the listings. The earning through ads depends, upon the number of clicks they get which is called CPC(cost per click model).

  • FEATURED LISTING

OLX and offers a featured listing option to the sellers. Featured links are those links that you see on the top, whereas, in a normal listing Ads are placed in OLX depending on how recent the Ad has been placed. Featured Ads will always appear on top of the list irrespective of any factors. Ideally all such should be mentioned as featured/sponsored/ads so that users don’t get illusion. In a featured listing, your ad will show up at the top of the search list and your ad will be shown first to the buyers whenever they search anything on olx.  The sponsored links appear depending on the keywords targeted by the advertisers. Being at the top of the list gives advertisers a way to get more leads.

Quikr

Quikr is yet another e-commerce, which is very popular in India and somehow looks and works similar to OLX. While the featured listing is one way to make money Quikr also follows the different route here. They also generate revenue by generating leads for businesses. It makes a gainful amount of money for Quikr. Recently Quikr has acquired few startups to diversify in different fields like Jobs, Spa and salons where they provide leads to these service providers.

Craigslist

The Craigslist is a yet another very popular rental listing website. It is mainly popular in USA. But the company doesn’t earn as much revenue when compared to other websites. The company only makes revenue equal to their operation charges. They charge $10 for a rental listing in New York and $25 for a job listing to occur in major U.S cities. If in San Francisco area, you need to pay $75 fee for a job to be listed. The company is trying to consider Google AdSense and paid advertisements to generate more revenue, but they are worried about the quality and clutter on the website due to ads, which is their main priority.

Other E-commerce Websites

There are many other e-commerce websites present, like Gumtree and BookSellBuy. They also earn through a basic business model, that is by providing premium membership Ads wherein the features depend on their own model, by featured ads and paid listings. So, almost every website uses paid ads to generate money.

However, in our earlier article, we have also guided our valuable readers to make money online through Youtube and Instagram. But all in all, these are the methods of how e-commerce websites make their money in a nutshell. As no company will reveal their real sources of income. But mainly we have covered all the points, which will help the new entrepreneurs to make money online.

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