Craigslist is one of the revolutionary business models of the last decade. They provide text based classifieds and have taken millions of dollars out of newspapers pockets over the years. However, the most interesting thing is that they don’t try to maximize revenue. They only charge $25-$75 for job ads and $10 for apartment listings in New York. In fact, the only reason they charge for apartment listings is because they received too many duplicates and thought it would cut down on them.
Over 26 million people visit Craigslist every month and this translates into an estimated $81 million in sales for 2008. Not bad for a small company that’s still private (although eBay now owns 25%). So how does Craigslist do this? I believe a large part is trust. Of course their site is easy to use, free for most postings and quick because of the lack of images. But it’s also trustworthy. Craigslist is the anti-corporation, they are out there to provide a service, not make the most they can off of you and people love that.
So next time you’re thinking of what you can charge your customers, think instead of what you can provide them with. The resulting changes may just create the buzz and goodwill that your company needs to jump sales year after year like Craigslist.
-Craig Sharkton
2 responses so far ↓
1 Mark // Dec 22, 2008 at 10:48 am
How does “26 million people visit Craigslist every month and this translates into an estimated $81 million in sales” when the only fees mentioned are for job listings, and apartment listings in New York?
2 Craig // Jan 4, 2009 at 10:04 am
Good point, a bad sentence. The traffic only indirectly affects sales as they don’t allow advertisements. But without the large number of people coming in they wouldn’t have people buying the job listings and apartment listings (in several cities).
Thanks again Mark for the correction.
Craig Sharkton
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