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How Does Craigslist Make Money Online?

Jacob is a 28-year-old website designer and SEO consultant for Fate Marketing. In his spare time, he loves to write for HubPages.

How does Craigslist make money?

How does Craigslist make money?

Does Craigslist Make Money?

If you are here, you are probably wondering just how does Craigslist make money? Being that it doesn't have any advertisements, it's actually quite a good question. Wanting to learn about different ways you can generate revenue online is the sign of a proactive marketer, so it's a good thing you are here! They make a boatload of cash, even though they employ just 30 people.

In fifteen years, Craigslist has become one of the most valuable websites in the world.

Sellers can post their ads, and buyers can search for items or services under many different categories. Today, there are about 700 different Craigslist websites that cater to postings all over the world over and in different languages such as French, German, Dutch, Spanish, Italian and Portuguese. Just glancing at the site, you quickly notice a lack of ads. Considering they only have roughly 30 people working for them and their profit is in the millions, it begs the question, "How does Craigslist make money"?

Late nights working online

Late nights working online

If Craigslist has no ads, how exactly do they bring in profits?

Well, According to its own website, Craigslist makes money by charging a flat ten-dollar fee for apartment listings in New York City, 75 bucks for job listings in San Francisco, and 25 dollars for job postings in six of its biggest U.S. markets. CL also charges a cool ten spot (in the U.S.) for any ad that comes under the category of “therapeutic services”.

On top of that, Craigslist charges five USD for re-posting any ad that is live and running. These are the ONLY ways the website Craigslist earns income. For companies offering classified ads, Craigslist can easily top them as the ads are mostly free to post, and the traffic that comes through is unbeatable. In a nutshell, the constant traffic and low- or no-fee business model keep Craigslist ahead of the game.

Quality in their skill and presentation

Newspapers have criticized Craigslist on several occasions, namely due to illegal activity and security issues rampant on their site. Names such as “Craigslist Killer” are well known and for a good reason. A documentary was even made telling the story about one particular man who was responsible for using Craigslist to find and kill his victims.

Traditional newspapers also criticize the fact that many people have also been arrested on Craigslist as they were selling knockoff designer items. Things such as fake purses, broken or stolen cell phones and counterfeit electronics are just a few of the many shady items that pass through Craigslist every day. Although the media demonizes Craigslist, it’s sometimes easy to forget that any website available for users to post on through the internet is going to be home to a plethora of strange or unwelcoming people. The Craigslist staff surely works very hard not only running the site but also works hand in hand with local police forces as they track down criminals who use the site for underhanded dealings.

They make more than enough, and newspapers hate it.

Obviously, Craigslist seriously hurts the newspaper publishers who are trying to sell their own classified ad space. If you wanted to rent your house or sell a car in the past (before the big CL) you had to purchase classified space in local newspapers. Today, you can post it for free on Craigslist, Angie’s List or eBay, and it will reach a wider audience than just a simple newspaper ad will. Surprisingly, the government actually works with Newspapers to give them more business to fill their pages.

For example, I am in the process of trying to create an LLC for my Web Design Business (LLC stands for Limited Liability Company), and the federal government actually mandates that you have to run an advertisement letting the community know that a new LLC has been formed in at least two approved newspapers for a minimum of 6 weeks. I looked all over the internet to find out why this is the case, and I couldn’t find any information as to why you have to. Strange right? If you happen to know this, please leave a comment in the comment section below and let me know why this is!

Coffee shop woman working online

Coffee shop woman working online

How Would You Make Money With Craigslist?

One of the ways Craigslist separates itself from the competition is by asking their own users for input on what to charge for their services, such as when selling a property or automobile.

For example, before they charged for apartment listings, they consulted a public forum where “Everyday Joes” could converse with them about what they felt comfortable paying for the service that the website was providing for them. Obviously, since people see value in reaching millions of people daily (Craigslist receives 20 billion page views per month), they feel a few dollars is well worth getting their advertisement in front of such a large audience.

People Will Try All Sorts of Things to Make Money

As more and more people venture into the world of internet marketing, trying to attain a livable monthly income from developing websites or flipping domain names, the question of how sites like Craigslist make money is an important one. Those new to the game and looking to get rich, as Craigslist has done, are fighting uphill in a losing battle. Everyone wants a slice of the money pie, and much to the dismay of the average internet user, they will probably never be able to match Craigslist's income.

Although, for someone looking to make a few extra bucks online, one could easily supplement their earnings by using the site as a tool. (Namely, by purchasing items from local thrift stores or yard sales and reselling them for a profit on Craigslist or eBay.) Craigslist and eBay are valuable allies if you are running tight on cash and looking for a fantastic way to make a bit extra.

It All Comes Down to Numbers

The bottom line is that Craigslist relies on the huge volume of users that visit its site every day. If you get enough people to view your website, as Craigslist has done, eventually, you will be able to monetize it any way you see fit. Remember, as long as people see value in your product or service, they will continue to ask for more and will continue to spend their money with you.

Do you have your own website that you make money off of, or do you earn income from the internet with a different source such as eBay reselling, YouTube or Twitch? Let us know what your strategy is for making cash online by including it in the comment section below!

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2017 Jacob Horning


Salty Sam 54 on May 09, 2017:

Interesting Hub, Jacob. I have been looking at site like Craigslist to sell items on along with one or two others to sell items on.

Of course nothing dodgy has ever been sold on a newspapers classified ads page. It's not like anyone has taken out ads for pyramid selling schemes, Poncy scheme in the US, in the past.