Is OfferUp the next eBay or Craiglist?

Online Marketing:

Online marketing means marketing your products and services on the internet, and there are many strategies and techniques used by marketers for selling their services and products online. E-commerce means buying and selling products and services by using electronic means such as mobile, web and internet. There are many freelancers available who can develop the right business for you by using various strategies. The main advantage of e-commerce is that it is available 24/7, and you can use it for B2BB2C or even C2C kind of business. Selling products online is the main business of many big names such as eBay, Amazon, and Craiglist. The use of technology for creating a billion dollar business involves cut-throat competition and there are many emerging companies trying to overthrow the established. Are you going to be the next digital tech company?

Craiglist Phenomenon:

Constant innovation is key to the technology industry; so the conventional wisdom used for Craigslist should have decimated the company a long time ago; Craigslist was founded by Craig Newmark in 1995, and they have practically kept the same design and yet have more than 55 million visitors a month; CL has not only survived but has flourished, and has virtually swept the newspaper industry into oblivion. None of the technology advances seem to have affected Craigslist, and it will be shocking for some readers to know that the company has around 50 employees, and have made around $700 million in revenue in 2016.

Ironically the company converts most of its sales into profits because of low costs. CL is worth between $2-3 billion dollars. However, despite getting richer every day the two e-commerce giants such as eBay and Craigslist have come under threat; Although the majority of Craigslist use is free, it is not a social organization. In order to cover costs, they started a $25 fee for posting Help Wanted ads in the Bay area, and later they continued to start charging for other services in categories such as Automobile and Massages; Actually, the prices were put into place in order to counteract spammers and later CL turned out to be extremely profitable.

Craigslist has refused to create a mobile app and did not take advice from third-party developers that tried to improve its experience by processing complaints against them and OfferUp CEO is convinced that the Craigslist ban on second-hand products is about to end, however, this possibly is an educated guess for many experts but they seem to agree that Craigslist makes $500 million revenue every year without breaking the sweat; Being popular must be great!!!

Rise of Offerup:

Nick Huzar is the CEO and co-founder of OfferUp. He started a classifieds service in 2010 and since then OfferUp has risen meteorically into a powerhouse which is expected to sell goods worth $20 billion this year, and this is about a quarter of business done by eBay in 2016. The American classified advertisements site Craigslist is under severe threat with the advent of OfferUp. We all know that eBay is a full E-Commerce site while Craigslist was your better chance of making a higher return as it didn’t charge any fee for selling items; So, for higher profits, Craigslist is a better bet than eBay. OfferUp has emerged as a definite threat to both eBay and Craigslist. OfferUp was started as a mobile-only hybrid between eBay and Craigslist, and people started loving Offerup, despite the site being mobile friendly.

You can list practically any item on OfferUp and It is so simple. Just take a photo, select the goods price and post using a short description. The buyers can browse the local products via Pinterest styled photo feed, and you can bargain with the seller by using the app and then arrange for a personal transaction. Huzar is well aware of the fact that more than 90% of the items lying around in the garage and in storages are not listed anywhere. The big question is whether the OfferUp will be able to persuade these owners to sell the items on their platform. Its investors are confident that OfferUp will become the Craigslist of the mobile market.

Other Emerging Players:

OfferUp is not the only one on Craigslist’s tail; LetGo has risen dramatically to $375 million basically through Naspers, the South African internet giant, and Facebook has launched its e-commerce service a couple of years ago; They are looking to cut OfferUp into and are doing battle already. Whoever has the largest number of buyers and sellers on their site will definitely win the war. The scary part is that the loser will be left alone, hold the bag and buried because the classified business/marketplace is about having a solid monopoly.

Craigslist still retains the larger share of the market; Craigslist started its business with mailing lists for some San Francisco events. It has developed into a site that offers plain and solid text links along with categories such as Furniture, Jobs, and Housing etc. There is no intent for monetizing this further as Newmark indicated in 2001, as this was the main reason for the attraction of Craigslist; As more and more people became net savvy, one of the first sites to demonstrate a strong network was Craigslist. Even today Craigslist has the most buyers, and even eBay envies Craigslist for this reason. Is Offerup moving in for the kill?

Craigslist Competition:

Well, the new entrepreneurs have started focusing on certain categories of Craigslist such as real estate, and many such competitors entering the wild have begun to take on the giant. The number of people visiting Craigslist showed a decline in February 2016. The core “For Sale” section of Craigslist remains unaffected though. The first competitor to make any sort of headway is OfferUp. They are claiming that the company has already overtaken Craigslist in certain categories. Are you looking for the Best Tips On Hiring Top Freelancers?

Security:

The hesitation people feel while using Craigslist has been negated by OfferUp as it makes posting plain, reliable and simple. They have implemented the use of buyer and seller ratings, and user accounts can be verified by using your FaceBook profile or driver’s license and phone number. The verification process is normally completed on the same day and a badge appears on your profile indicating that your account is verified; Although the verification is not mandatory, it provides greater safety, and you may choose to buy or sell to verified people only.

The biggest advantage of using OfferUp over Craigslist as a seller is that there is no need to publically disclose your details such as address, phone number and email id in your advertisements. The transactions can be conducted anonymously through their messenger in the mobile app and it is pretty fast as well, and personal data can be excluded in a CL ad as well but it makes things slower. A potential buyer would always like to reach you directly and fast, and not waiting to receive your email and hopefully get a reply.

Another problem with Craigslist is that you start getting telemarketing calls due to the contact detail listing, but this can be effectively controlled by listing words instead of numbers, as this will dissuade the bots, although it can be annoying to do over and over especially when you are posting multiple ads, and if your details get compromised the spam calls will start coming.

Posting Your AD on Offerup:

The process of posting your advertisements on the OfferUp app is easy and quick, and normally takes less than a minute and it is done by using your cell phone. Just take a picture of the product(s) you are selling and upload it to the app. Write a brief description of the item and add your expected price. Relatively posting on Craigslist takes longer. Unlike Craigslist, you can also create multiple instances of your ad without being barred or flagged. When a potential buyer makes an offer you will receive an instant notification with a sound effect like a cash register.

Low Price Offers:

Both OfferUp and Craigslist face one problem and that is an overload of people expecting lowest prices. When you submit your listing, then you will start receiving low ball offers and most of them disappear when a realistic counter offer is made, and this doesn’t mean that it will be like this all the time. You can make good priced sales as well. OfferUp has become quite popular and in case you live in a densely populated area, then your chances for the deal and sale would be very good.

Meeting The Buyer: 

On both Craigslist and OfferUp, you sell the product locally and so you make arrangements with the buyer to meet somewhere for the transaction. Payments are not to be made through the app. It is best advised to meet the seller during the day in a public place and pay by cash; Of course, if you have larger items to sell such as furniture, you can ask the buyer to visit the place where it is kept. You will find that the no-show cases are pretty rare with OfferUp, as this has become a problem with CL. Do you love offerup or craigslist best?

Giving The Buyer A Rating:

After the transaction has been completed, the seller can rate the buyer and this rating will get displayed on buyer’s profile. This rating is handy while deciding whether or not to sell the item to a buyer. It is always safe to accept offers from buyers who have a decent rating and a verified profile. Craigslist does not offer a rating system and you never know who you are dealing with.

About Letgo:

Another serious competitor is LetGo. It is run by Alec Oxenford from Argentine. It was launched in 2015 and is growing faster than both CL and OU. It is also active in some overseas markets such as Norway and Turkey. LetGo and OfferUp together have risen more than $600 mil so far. But the good old CL may stop them in their tracks. Most people do not think about the players until they have an item for purchase or sell. OfferUp monetization strategies have begun although they were not charging anything for sellers or buyers until last year; But as long as LetGo is persistent you can rest assured that life will not be easy for OfferUp. LetGo spent an estimated $100 million on TV ads in 2016 compared to $1 million by OfferUp. But the competition is heating up and LetGo is ready for a fight.

Facebook eCommerce Efforts:

Neither LetGo nor OfferUp can disregard the presence of the big monster which is FaceBook in the e-commerce market although, they are completely at sea at the moment in their mangled up e-commerce efforts, however, if they can engage a fraction of their 1.9 billion users they will make a huge difference, In fact, it is rumored that it was the number of people downloading the OfferUp app through FB that brought Facebook’s attention to the business. This rumor was later denied by the FB.

Conclusion:

Huzar is monitoring both FB and LetGo activities, and he knows that the main enemy is still Craigslist. The 23-year-old giant is still a force to reckon with, and despite being outdated technically, CL is still a decent place to buy and sell locally. OfferUp is great though for its speed and simplicity. The availability of buyer ratings does make life easier than having to deal with shady characters; Most people will not be happy to have their phone number and email id disclosed publically. OfferUp charges a small amount for bumping the items to the top of the newsfeed. CL and FB do not charge anything for this service; This along with its inability to sell via computers and laptops are probably the only things that are on the negative side of OfferUp; Nothing drastic enough to change your mind about OfferUp though! Yes, eBay needs to watch out for this emerging competition!

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DGStaff Administrator
Digital Global is a not for hire Business/Technology writer that writes on topics such as Business, Making Money, Entrepreneurship, startups, and all sorts of business-related digital technology.
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