A lot of Indians don’t know this but OLX is not originally an Indian company, it is an American company.
OLX stands for Online Exchange and they help their customers do what their name suggests. With OLX you can sell your used products. It’s as simple as that. You can sell your old furniture, a phone, a car or even a house on OLX if you wanted to.
OLX ran into a bit of a trouble when people started listing “maids” on their platforms and it enraged the Indian social media world. Apart from some controversies, OLX has become a household name in India with their “OLX pe Sab Kuch Biktha Hai”campaign, which translates to “Everything Sells on OLX”.
Their advertising campaigns are that popular, that young Indians use “OLX pe bech do” which translates to “Sell it on OLX” as a reference to getting rid of something.
So let’s get to the business side of this article. How does OLX work?
OLX is a platform that connects buyers and sellers of second hand goods. Unlike Paytm that has an e-commerce part in their business model, OLX does not sell good themselves.
They collect the phone numbers of their users and build a database for it with which they advertise their services repeatedly.
How do online classifieds websites make money?
Google AdSense is the most common way of making money online.
If you can drive enough traffic to your website, then you can place ads through Google’s AdSense system and you can see the money roll in. With platforms like OLX, they bring people who want to get money in return for their products and hence a lot of people log in on a daily basis.
OLX’s Indian competition, Quickr, was on track to make about $50 Million in revenue with Google AdSense being one of their revenue models.
When people want to sell high ticket items like Cars and expensive antiques, then they use the premium listings option to get more eye balls, as well as, they hope to create an Auction like atmosphere for their product with a lot of people bidding for their item.
Another monetization strategy for this kind of businessesinvolves sending leads to small and medium businesses that provide services like coaching for students, plumbers, carpenters and a whole gamut of other services.
For people who are searching for services like the one mentioned above, they are given the numbers of these service providers which drive leads to those businesses.
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How does OLX make money?
OLX clearly makes money through Google AdSense.
The ads have a very prominent placement on their homepage. OLX also get pretty aggressive with their Google AdSense with sticky sidebar ads.
You would definitely see them experiment with other forms of monetization like paid listings, services and more.
The future of classified websites will be combined with direct service providers.
Quikr, which is OLX’s biggest competition in India, has launched an addition to their services where they inspect the car before you list it on their platform, adding more value to the sale.