LetGo came up with a business model that shocked the world. After the official launch of the company, they charged no fees for their services. It spurred questions like “How does Letgo make money?”
A lot of people thought it was a crazy thing to do but today their results speak otherwise. A market cap of billions and annual profits hitting $1.5 billion tell you they’re doing very well.
What was the business model that made this company grow big? How does LetGo make money?
These are some of the questions this article will provide answers to.
The LetGo Business Model
Letgo is an online classified platform wherein you can easily sell or buy things. Their business model holds a lot of similarities to OLX.
Their mobile app is available in more over 34 countries in the world featuring over 20 million users as well. “ Letgo featured listings and Letgo Pro” remain the two advanced features of this company.
An amazing aspect of the Letgo Business Model is that it uses geolocation, artificial intelligence and image recognition. This listing of the products is completely based on the user’s location and preference.
As a buyer, you meet with the seller at an agreed location. In this place, you exchange the product for the money.
Since this transaction happens offline, how does letgo make money?
Read more: Offerup vs letgo: Know my best Selling App
How does LetGo Make Money?
LetGo makes money using three different models which include:
- Freemium Model
- Ad based Model
- Subscription-Based Model
The freemium model of Letgo is for product owners who seek to list their products on the top. Letgo freemium model comes with a feature called the “ bump up ” & featured listing.
The “bump up” feature allows users list up their product on the top positions for approximately 7 days in a row. The product owner even has a feature to attract the audience with the sale.
Letgo usually charges the product owners with fees ranging from $0.99 to $3.99 depending on the product. A lot of users on the Letgo are attracted to this feature as it allows them to play safe. This way Letgo earns revenue from the Freemium model.
After LetGo gained a level of traction, it sought to increase its earnings. As much they had a marketplace buzzing with people, they were not ready to set commissions.
To still earn, they started publishing sponsored adverts in form of banner ads. The higher the impressions they got on the ad, the more money they made.
Letgo comes with the two subscription plans for its users.
#1. The Super Boost Mode
When a user subscribes to super-boost mode, a product of the user will automatically remain in the featured list by the systems every single day. Letgo will adopt the data of products in the marketplace and show it in the featured list. In fact, the product with the highest probability to be sold can be seen on the featured list.
#2 The Letgo Pro plan
This subscription plan is designed for the car dealers. The goal of this plan is to provide more leads to car dealers. The pricing for the Letgo pro 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 comes with a 30-days free trial.
A good number of web platforms have marketplaces but few have recorded the same success as Letgo. They’ve grown so big within a short while. The writeup clearly answers the question “How does Letgo make money”? I believe their business model is replicable.