We all have belongings that no longer serve a purpose lying around our house, from books that we’ve read thoroughly more than once to garms that are no longer suave. Happily, there’s a way you can dispense of your unwanted possessions while making a few extra bucks off of it.
Letgo is a smartphone app that enables you to sell dispensable goods and chattels online to the folks in your area. Think of it, if you will, as a means of setting up a virtual garage sale. Okay, so how does Letgo make money, exactly? This article attempts to address this very question.
Overview of Letgo
Letgo is an easy-to-use mobile app that enables you to list your dispensable belongings for sale to the people in your area. Using Letgo, you can sell just about anything, from furniture and cars to books and clothes. The app is limited to goods only and can’t be utilized to offer services.
One of the perks of using Letgo is that it allows you to communicate with buyers and sellers with ease using its onboard chatting feature. Note that the app makes use of your phone’s location in order to show buyers and sellers that are within your proximity so that no shipping is required.
The process is simple. All you need to do is enlist an item for sale and wait for a nearby buyer to contact you. Thereafter, both the buyer and seller will have to agree on a meeting location and a payment method in order to complete their transaction. Doesn’t sound very complicated, huh?
How Does Letgo Work?
Letgo is based on a similar model to that of OLX, which doesn’t come as a surprise considering it’s one of the latest startups of Alec Oxenford, the co-founder of OLX. The platform is available in over 35 countries and has garnered over 20 million users since the day of its inception.
What helps set Letgo apart from other competitors is its utilization of artificial intelligence, image recognition, and geolocation. This means that the listing of the products is based entirely on the user’s preferences and location. Transactions between buyers and sellers take place offline.
Letgo will only display listings that are within 50 miles from your phone’s location. You can easily apply filters to narrow down your options. Some of the featured filters include distance, category, cost, newness, and more. The payment method is decided on between the buyer and seller.
With the aid of Letgo’s image recognition functionality, your selling and purchasing experience is going to be optimized to your liking. For example, if you upload an item’s photo, the platform will automatically suggest various categories that are related to the picture you’ve uploaded.
Letgo also has a simplistic review functionality through which you can leave comments and rate your experience with the platform after having bought an item from a seller. Both your rating and feedback will be displayed on the seller’s profile, helping discern good sellers from bad ones.
To make the user experience even more satisfying, the Letgo chatting functionality incorporates preset questions and responses, allowing you to quickly message buyers. If you’re interested in what a seller has to offer, simply hit them up and discuss the price and meeting location.
How Does Letgo Make Money?
Unlike most competitors, Letgo is a free marketplace where users can easily advertise and sell items without having to worry about getting charged. eBay, for instance, charges 10% on every sale you make. Similarly, OfferUp and Mercari charge 7.9% and 10% respectively.
So, if Letgo doesn’t charge users on every sale they make, how does the platform generate any sort of profit? Well, Letgo utilizes an excellent business model that is based on multiple revenue streams, including a freemium model, subscription-based model, ad-based model, and more.
Letgo adopts a freemium model as its main business model, meaning that users can download the app, sign up, and advertise their listings entirely for free. The main idea behind this model is to establish a huge user base in a short amount of time. The money-making comes later.
The freemium model is highly appealing to new users because it allows them to play it safe. It’s completely risk-free for both the users and the platform since the users won’t be required to pay a single dollar and the platform won’t risk losing users that don’t want to pay to list their items.
The subscription-based model plays a pretty major role in generating a considerable amount of revenue for Letgo. The subscription model is the source of Letgo’s recurring payments, making it the most stable out of all the models that Letgo uses. It offers two monthly subscription plans.
The first monthly subscription plan is the Super Boost mode, which basically allows you to get one of your listings featured automatically every day. The system picks which product to feature based on metrics that ensure the selected item has a high probability of getting sold quickly.
The second monthly subscription plan is the Letgo Pro plan. This plan wasn’t present when the platform was first created. It was created later on to help professional car dealers generate more leads. It’s priced at $99/m for 30 deals, $399/m for 70 deals, and $599/m for 150 deals.
It’s worth noting that Letgo provides a 30-day free trial period on its Letgo Pro plan, allowing car dealers to take the platform for a spin before committing to a monthly fee. The two plans employ unique features and advanced technologies that enable their users to sell quickly and efficiently.
In addition to its subscription-based model, Letgo also extends multiple in-app offers. These are one-time features that users can optionally use to garner attention to their listings and maximize their chances of selling. With the aid of in-app purchases, you’ll be able to sell a lot quicker.
One of Letgo’s in-app purchases is the ‘Featured’ functionality. If you pay for this function, you’ll be able to feature your listings at the top of other users’ walls. Your listings will be highlighted in users’ feed with a unique “Featured” ribbon. Listings can be featured for various time periods.
Another cool thing about having your listings featured is simplified communication. Reaching out to sellers is already pretty easy without paying a single dollar, but with featured products, there’ll be a special button that enables potential buyers to reach out to you with a single tap.
You can easily sell items on Letgo using its basic features, but the process might take a while. If you employ the in-app purchases or subscription plans, the time span required to sell your items can be shortened significantly, and that’s how Letgo makes its money and boosts awareness.
The neat thing about Letgo is that its in-app purchases appeal to a wide range of people, as the purchases range from $0.99 to $44.99. This means that no matter your spending habits, you’re guaranteed to find a way to boost your sales without paying an extortionate sum.
Considering how Letgo amassed a massive user base in a relatively short amount of time, many advertisers employ the platform as a place to advertise their offerings. As users interact with the banner ads displayed by the app, the platform earns a revenue, courtesy of being the publisher.
By displaying banner ads, Letgo doesn’t risk losing any users since users aren’t required to pay anything, while at the same time earning a profit from advertisers. Ads can be quite annoying if they’re not of any relevance to you, but then again, you’re not being charged for your sales.
Another cornerstone of Letgo’s business model is that it raises considerable capital from many investors. Actually, in its first year of operating, the platform was able to raise a venture capital funding of about $100 million. It raised another $100 in 2016 upon merging with Wallapop.
To add, in August of 2018, Letgo raised $500 million from Naspers. After five rounds of investor funding, the platform was able to amass a total of $975 million. Combining all of these business models together, it’s not hard to see how Letgo is able to make money without charging users.
What Can You Sell/Buy on Letgo?
Upon visiting the Letgo homepage, you’ll be able to see a list of different categories that you can browse, along with local listings. Browsing the local listings won’t be efficient if you’re looking for a certain type of product. It’s better to utilize the categories feature if that’s the case.
- Home goods
- Leisure goods
- Sports goods
- Giveaway stuff
It’s crucial to note that, along with the listing’s picture, there’s also a user-generated description. Why is that important, exactly? Well, since the descriptions are user-generated, their quality will vary from one user to the other. The better your descriptions, the higher your conversion.
Make sure your descriptions are short and precise if you wish to sell it quickly. Also, make sure you include an asking price for every product you list. Negotiations can take place between the buyer and seller as they’re chatting, but still, include an asking price to avoid wasting time.
How to Sell Your Items Quickly on Letgo?
Don’t like waiting and you just want to get rid of your unwanted belongings? This section of the article attempts to highlight a number of tips that you can use to sell your items fast on Letgo.
Price Your Items Competitively
It’s critical to remember that the main goal here is to get rid of dispensable items, not to squeeze as much money as possible out of potential buyers. With that said, you may want to spy on your competition and price your items slightly lower to ensure making the sale a lot faster.
Upload High-Quality Pictures
Make sure you take as many high-quality pictures of your listings as possible, showing as much detail as you can, even if it means displaying the marks and imperfections. This helps boost the buyer’s confidence in purchasing your item and it minimizes questions and concerns.
Describe Your Listings Properly
Your listing’s description should be as detailed as possible without the fluff. For example, if you intend on selling clothes, you want to specify the material from which the garment is made from. Similarly, if you intend on selling a video game, you want to specify the console it’s intended for.
Respond to Questions Quickly
If you want to sell your listings quickly, you have to respond to potential buyers quickly. If you’re slow to reply to potential buyers, don’t expect to sell your items as fast as you want. You want to keep your app notifications on so that you’re always informed when asked questions.
Write the Final Asking Price
If you don’t enjoy haggling, you want to be as honest as possible in your description of the item you’re trying to sell so that the buyer doesn’t feel inclined to haggle when evaluating the item in person. Also, write your final asking price and ask potential buyers to bring the money in cash.
All things considered, Letgo is an excellent marketplace to get rid of your unwanted possessions without getting charged on every sale you make. If you’re looking for an alternative that provides a section for sellers that are willing to ship their offerings, you may want to check out OfferUp.