OLX Business Model Explain: How OLX Makes Money?

OLX business model is one of the key factors that has made it a well recognized name in the e-commerce sector. 

Olx offers people a platform who want to sell their used goods and earn money in return and also offers others to buy items and goods in a budget which are pocket saving! Olx is considered as one of the best platforms which offers this kind of service for selling and buying used items or goods. 

Unlike other players in the e-commerce sector, Olx stands with a unique business model that has transformed the way people used to sell or buy used goods earlier.

While dating back to traditional methods of this service, either it involves a hush-hush deal and negotiation or not even that, mostly people used to give their used items or goods for free. But since Olx entered the market it revolutionized the way people use to carry out this service. 

Olx Company Overview 

This innovative service provider platform that emerged in the complex landscape of the e-commerce market, was founded by Alec Oxenford and Fabrice Grinda in 2006.

Since its introduction into the market Olx served well to the people with their unique service selling tactics and also by not charging any commission on the deal.

Key highlights:

• Olx, which is now one of the largest online classifieds websites, in the early days faced stiff competition among the established players  in the race. 
• This tale was until, when Naspers a South African media group acquired a major part of the company, which led more investors to invest in the company and infused more resources. 
• In the early days before Naspers acquired a part of Olx, it was funded by several investors, some of them are Nexus Venture Partners, General Catalyst Partners, and Bessemer Venture Partners.
• As of now Olx has 2M+ monthly paying listers.
• Olx.in India has 48.61M monthly visits. 
• Its page visits are 1.72 million. 
• And most of the traffic that comes to the website is from mobile devices which accounts 92.76% of the total visitors, while the remaining comes from desktop which is 7.24%. 

Now let’s get started with the Olx business model!

(A) Olx Business Model 

Unlike the other players in the line, Olx follows a unique business model which is “Scale-Dependent Business Model”.

A scale dependent model is recognized as the one which can handle high demand, high growth, and can infuse more resources which are capable of handling increased workloads without sacrificing performance and efficiency of the business or the company.

Olx website serves as the classified portals for the users who wish to sell or buy used goods and items and earn a good amount of money in return. The buyer and seller can easily contact each other and even negotiate on the prices.

The website facilitates the buying and selling of a wide range of products and services through online listings. 

One of the interesting features of the website is that Olx does not charge commission on the deal rather operates on different streams to earn their revenues. 

(B) Key Elements of Olx Business Model 

(B.1) Product Categories 

The website offers listings in various product categories, which involves vehicles, appliances, services, electronics, clothes, home spaces, and more like that.

This provides users with the free hand space to either post their selling items or buy any of it from the product categories. With that users can create free listings to sell items or browse listings to find products they are interested in purchasing. 

(B.2) Geographic Reach 

By operating in over 45 countries, Olx has undoubtedly spread its services at the global level. This has made Olx a global online marketplace.

It tailors its services and its platform according to local languages and currencies that provides users a personalized and accessible experience residing in different regions.

(B.3) Free Listings With Premium Services 

Olx at the initial phase offers users with a free basic listing option to create listings, which helps them to organize their goods and items in a neat manner.

Not only that, the website offers premium features and promotional options for users and businesses that are looking to enhance their listings’ visibility and reach a larger audience.

(B.4) App and Website 

OLX offers a user-friendly mobile application for both android and iOS systems, which allows users to access the platform with ease and conveniently within their reach on their smartphones.

The website of Olx is suitable for those users who choose to browse listings on desktop or mobile web browsers. Resulting in a multi-channel approach towards users. 

(B.5) Safety Features 

OLX encompasses various factors that promote its safety and trust on their platform, which includes its ratings, incorporation of new technological features, user reviews, and of course it’s tips to maintain good profile and safety. 

(B.6) Monetization of the Website 

Rather than taking out their commissions from the deals users made on its platform, Olx generates revenue through various monetization streams, which includes more advertising, promotions, premium services, etc. 

(C) How Does Olx Make Money? 

Olx follows a unique model for its revenue earnings which includes its affiliate ads on its platforms, sponsored ads, premium listings, click count, site monetization, and more. 

(C.1) Google Ads

Olx makes most of the revenue from Google ads monetization. Olx displays Google ads on its platform based on users’ searches.

For this Google works with partners who in return works with Google and other ad partners who facilitate the ads for their website. The number of ads displayed varies on different pages of the website. 

(C.2) Premium Feature Listing 

Olx offers its users with the premium listing feature option, which in turn contributes to their revenue generation. This feature helps users to make their list appear on the top. This featured listing factor is a source of profit for both, the seller as well as Olx. 

(C.3) In-App Purchases  

Olx charges users or other businesses with a fee if they want to display or promote their ads on their platform. 

(C.4) Google Search Engine 

The website page or the app has a search bar for customers to look up products.

The time they perform any search result for any service or product, the results that pop out are optimized with the custom search engine monetization of Google for advertisements, where the first two-three results obtained are from Google.

(D) Marketing Strategies of Olx

(D.1) Partnerships and Collaborations 

Olx associates with various property brands that help them to connect buyers directly with the sellers or the company. Apart from that it attracts more investors to invest into their business and collaborates with many companies or famous names.

(D.2) Digital Platforms 

Olx uses a mix of platforms for its digital marketing. It uses various social media platforms like Facebook, Instagram, to market their service and to accommodate a more wider reach. Also with that it delivers targeted advertisements and blogs that helps them to stand out in the market. 

(D.3) Celebrity Endorsements 

One of the key reasons that promotes Olx popularity. Olx collaborates with various big names or influencers which in turn adds more fame to their name and helps in becoming a more recognized name. 

(D.4) The Social Impact 

Olx since 2021 is promoting social and environmental change, and is driving towards change. It has turned into a carbon neutral business, which helps them create a positive impact on the environment.

Along with that the company is also giving back to its communities in India and Brazil, maintaining a good brand image for the company as well as carrying out their responsibilities. 

Note: Also, visit the following articles-

• IND Money Business Model,
• ITC Business Model,

(E) Summing Up: Olx Business Model 

Olx, has emerged as a power hub in the e-commerce market place which offers selling and buying of used goods and items on their platforms. In India, Olx is being referred to as the largest online classifieds. 

Along with that Olx business model is one of a kind that has led to its immense growth and popularity since its inception into the market. Olx operates on a Scale-Dependent Business Model, according to which it can handle high demand, high growth, and can infuse more resources into the business.