OfferUp is a great marketplace to eliminate your unnecessary belongings and make extra money simultaneously. Additionally, OfferUp allows users to buy second-hand objects at a slashed-down price. So, OfferUp is a mobile-first C2C platform where users can sell and buy clothing, furniture, automobiles, and more.
How does OfferUp make money, by the way? As a user of the platform, such questions can daunt you. Reportedly, OfferUp makes most of its revenue by collecting a fee from its users. How much does charge to sell?
The guide will answer all your queries regarding OfferUp’s business and revenue model. Let’s get started.
A Brief Overview of OfferUp
Before you learn how OfferUp works and makes money, let’s oversee what the platform offers. Established in 2011, OfferUp is a mobile-first C2C platform that helps people sell their unused objects to make some extra bucks. On the other hand, buyers can find second-hand products on the platform at cheaper tags.
Is OfferUp trusted? OfferUp is among the top 50 most downloaded free apps on North America’s Google Play Store and App Store.
After acquiring LetGo in March 2020, OfferUp has become more powerful and raised $120 million. Here are some essential details about OfferUp:
- Founders: Arean Van Veelen and Nick Huzar
- Headquarters: Bellevue, Washington
- Industry Type: Marketplace, Application
- Number of App Downloads: Over 100 million
- Total Funding Amount: Around $381 million in more than 10 rounds
- Company Valuation: $1.4 billion
Currently, more than 20 million users rely on OfferUp. The company has raised funding from investors such as T. Rowe Price, Allen & Company, GGV Capital, Warburg Pincus, etc.
How Does OfferUp Work and Make Money?
If you are interested in downloading OfferUp, the above question popped up in your mind. After all, it’s important to clear all your doubts before using the platform. How does OfferUp work?
OfferUp is an online marketplace where sellers can list their items for sale. In addition, buyers can navigate through the application and search for the products they are interested in. After buyers find something useful, they can communicate with the seller using the app’s chat interface.
For example, buyers can seek clarifications regarding the listed product or negotiate the price. Once the buyer and seller agree on a price, they meet to buy or sell the product. On the other hand, the buyer must complete the purchase procedure within 2 days of the product delivery.
Once the deal is done, the seller and buyer can rate each other, including the product review. Such a unique feature of OfferUp helps users to find trusted products and deals. The seller makes money through OfferUp. Then, how does OfferUp make money? Here’s what we find out:
Collecting Fees from Sellers
OfferUp is a huge online marketplace that allows sellers to sell their products in various categories like sports equipment, toys, automobiles, furniture, clothing, and more. However, we never mentioned that it’s a free platform.
OfferUp charges registered sellers a commission fee for each deal they seal. Typically, every seller has to pay $1.99 or 12.9% of every sale price to OfferUp, whatever option is greater.
Transaction Fees
Another monetization strategy of OfferUp is the transaction fee it charges to its users. For example, a user has to pay a fixed percentage of the sale price to the marketplace whenever they make a purchase or transaction. This benefits third-party payment processors such as PayPal and so on.
Promoted Listings
How does OfferUp make money Reddit apart from charging users directly? The marketplace offers a dedicated promotion feature for sellers to emphasize that particular product. Thus, buyers can quickly notice it, and the product can sell away.
With OfferUp’s promotion feature, a seller can promote his or her product, which will appear in the first 50 search results. You can purchase promotion functions for several days or weeks as a seller.
Through Pay-Per-Use Services & In-App Purchases
OfferUp offers Promote and Promote Plus programs for sellers to level up their sales game. The Promote Plus is a monthly subscription-based program that allows sellers to promote their products for a longer term.
So, sellers have to pay more every time they want to promote their products or take advantage of the advanced features loaded in the app. Besides this, sellers can use Bumps to keep their products at the top of the search results.
The listing keeps sliding down the feed for every Bump a seller purchases. Thus, OfferUp makes a significant profit by promoting in-app purchases and services.
Verified Merchant Program
OfferUp offers a Verified Merchant Program or Verified Dealer Program for those sellers who are interested in the sales of automobiles. How does OfferUp make money through a Verified Dealer Program?
The feature permits car dealerships to see automobiles using the advanced tools and technologies:
- Automatic DMS importation
- AI-integrated top lead indicators
- Click-to-call feature and more
So, OfferUp will charge car dealers to include add-on services to make the overall selling process hassle-free. On the other hand, the cost of the Verified Dealer Program can vary depending on the automobile dealer’s interest and the features they want to use.
Advertisements
Apart from being a large C2C marketplace, OfferUp is a great business advertising platform. With its huge user and customer base, OfferUp sells advertising space on the application.
Thus, businesses can advertise their products and services on the OfferUp application and reach an enviable audience base. Hence, letting businesses advertise on the app is another monetization strategy for OfferUp.
How much does OfferUp charge for advertising? The charge depends on the ad’s display time length and size.
Premium Subscriptions
Users often complain about frequent advertisements on OfferUp. Since OfferUp gets paid by businesses to put them up on its walls, you won’t get rid of them unless you pay a price. Yes, you can skip advertisements by making your account a premium account on OfferUp.
A premium subscription for an ad-free experience on OfferUp costs $7.99 monthly. Additionally, you can reach more people than a regular account, feature your listing, and use advanced selling features. Not to mention, OfferUp generates recurring revenue from this subscription-based business model.
Partnerships
How much does OfferUp charge for shipping? For shipping, a seller has to pay 12.9% of the listed product’s final price or a flat $1.99, depending on the higher bid. However, OfferUp partners with USPS for shipping purposes.
Thus, OfferUp earns a percentage of the delivery fee. Besides a partnership with USPS, OfferUp is a proud partner of other strategic companies and investors. These partners offer shared revenue and cross-promotion to OfferUp.
In Conclusion…
How does OfferUp make money? We hope the guide answers your questions regarding how the platform generates revenue. OfferUp is a very successful business for letting users upgrade their belongings, earn extra money, and keep delivering what the customer requires. Additionally, it’s easy to register yourself on the app and start earning.
