While it’s a great place to shop for many items online, that isn’t our focus. Here, we’ve revealed different ways through which OfferUp makes money.
If you’ve wondered about this, we’ll help by providing ready answers. Read through the whole article to have a clear understanding of the different earning strategies deployed.
OfferUp is a trusted marketplace for buyers and sellers to exchange various goods.
Such goods include clothing, power tools, gardening equipment, baby gear, furniture, appliances, shoes, bikes & scooters, kitchen stuff, toys, electronics, home décor, pet supplies, and wedding items.
OfferUp Revenue & Business Model
Is OfferUp free to use? This question opens up our discussion on how the company earns money.
Users can post and browse items for free. Plus, both sellers and buyers on the platform only get to purchase items for free when using cash.
When it comes to how it earns money, OfferUp does so in many ways. The company earns money through promoted listings, seller fees, third-party advertisements, and verified dealer programs.
Stating these alone won’t be enough to gain a proper understanding of how things work.
i. Promoted Listings
OfferUp provides tools that help sell your listed items faster than they normally would.
All sellers have access to this tool but must pay a token to Offerup. This allows your items to go to the top of the list. In other words, your items get seen more often, making them sell faster.
Now there are two types of promoted listings. These include promote and promote plus. What are the differences between the two? Let’s find out.
ii. Promote
With a promotion package, sellers get to sell their items faster.
This might sound quite vague to some readers. However, to make things clearer, sellers using the promote tool get to increase their product visibility by an average of 14 times more views each day.
This is a significant improvement that can be taken advantage of.
By promoting your items, your items get to appear within the top 50 items of featured positions of category, search and browse results. Further benefits are seen when buyers seek your type of items.
When they search, your promoted items are seen much sooner than non-promoted items of similar nature.
Other sellers using the promote tool also get a fair share of rotation and exposure for their paid items. Payment for promotions only lasts for a set time. This might last anywhere from 1 to 3 days.
If you seek ongoing promotion, you’ll have to switch your subscription to promote plus plan.
OfferUp allows sellers to buy or subscribe to their promoted listings through a simple process. To start, all you have to do is sign into your OfferUp account and tap on “selling” at the bottom of the screen.
Now, choose “sell faster” on the item you wish to promote. If you can’t find the “sell faster” feature, it isn’t currently available.
Choose the time duration you’d like to promote the item and make the payment. This immediately moves your item into the featured position section with “promoted” appearing.
iii. Promote Plus
OfferUp also makes money by providing a “promote plus” feature for sellers.
Like it is for “promote,” promote plus allows increased visibility for your item by an average of 14 times more views. Buyers see your item faster in their search results due to its higher ranking or visibility.
This is a paid monthly subscription that can be canceled at any time. To subscribe, all you have to do is tap “sell faster” on the item you’re selling. Next, tap on “promote plus” to subscribe.
Make your payment through the app store to have the item marked “promoted.
iv. Seller Fees
Asides from promoted listings, OfferUp also makes money from seller fees.
Here, the company charges sellers a minimum of 12.9% of the sale price of their item. So does that means items can’t be listed freely? Not at all! Items can be listed free, but deductions will be made when the item sells.
This is one of the strategies used by the company to earn revenue. It’s commission-based and excludes the shipment cost despite being a percentage of your items’ final price.
Is the seller fee transparent? It is. You’ll see the exact amount displayed when you accept an offer.
It gets deducted from the final sale amount before the money gets deposited into your account. This applies to all other products listed on OfferUp.
v. Third-Party Advertisements
One other way OfferUp makes money is from third-party advertisements.
This revenue model works for the company but doesn’t provide a clear picture to determine just how much they make. Here, advertisements are received from third-party networks.
According to worth-of-web and other sources, estimated earnings may be around $14 million per year in ad revenue alone.
It’s important to note that all figures provided here are just estimations and not official figures issued by the company.
vi. Verified Dealer Program
The verified dealer program allows car sellers to list and sell their vehicles on the platform. The “autos section” is where these cars can be listed.
In terms of the revenue earned, OfferUp charges a monthly service fee of $50. This is accompanied by another $100 charged after a successful sale of every vehicle.
According to the company, around 10 % of US car sales happen on the app. This translates to significant revenue for the company.
Does OfferUp Make Money from Buyers?
So far, most of our discussion has focused on the earnings of OfferUp, which reveal a bulk of earnings coming from sellers and advertisers.
Are buyers charged a percentage of the purchases they make? On the surface, it seems like buyers on the platform attract no such fees.
These are ways through which OfferUp earns its revenue. However, the exact amount of revenue earned is what’s not clear. It won’t be in business if its business model affects its earnings.
Only its executives know its real earnings.