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Many Craigslist users have wondered how the site generates revenue. On the surface, it appears that Craigslist does not charge a fee for anything and that view is almost correct. The site charges fees only for a handful of classified sections, while posting in most sections remain free. Many financial analysts have prompted Craigslist to boost revenues by adding things like banner advertising, but the site has so far resisted any attempt to commercialize itself.
One of the most popular ways to make money on Craigslist today is through affiliate marketing, though now Craigslist has stepped up in security measures. It is incredibly easy to do this and you have the ability to make as much money as you want in the long run. EVERY single ad I have ever placed on Craigslist has gotten this response from the first 2 or 3 people. No need to put that in your ad though, just ignore them. Responding does give them your real address, so as someone else suggested, use a spam (throwaway) address for all of your Craigslist ads.
Income Streams
Craigslist makes money only through a handful of revenue streams. It charges a $25 fee to post a job listing in six major U.S. cities. It charges $75 for a job listing in the San Francisco area. Last, the company charges a $10 fee to list an apartment rental in New York. The revenues generated from these fees cover only the operating expenses of Craigslist. The company has not made a profit since its inception. This is intentional -- Craigslist president Jim Buckmaster has stated that creating a superior user experience is more important to the company than making money.
Potential Income Streams
Craigslist is considering other revenue streams like including banner advertising or Google text ads. However, the company still hesitates to do so because it fears advertisements would take away from the quality of the site. Craigslist president Jim Buckmaster notes that the site deliberated for years about charging fees for job listings; thus, a shift to banner advertising may take time to unfold.
Confusion Over Business Model
Some Wall Street analysts like UBS have been confused about Craigslist's business model. Buckmaster has stated that generating a profit is not a central goal for the company. The revenues it takes in from job listings cover operating costs, but the organization has yet to make a profit in its history.
The company does not see problem with this however because they focus almost exclusively on maintaining and improving the website. It also does not need more revenue as it has no plans to hire more employees. Craigslist operates with only two dozen workers.
Effect on Newspaper Classified Ads
Since Craigslist's inception in the late 1990s, the revenues generated from newspaper classifieds have dropped significantly. A study by the Newspaper Association of America found revenues between 2000 and 2010 dropped from $19.6 billion to $6 billion. That represents a 70 percent decrease, and the trend does not appear to be slowing. Although many factors contributed to this decline, the association believes sites like Craigslist played a large role in cutting into newspaper revenues. This makes sense considering that it costs consumers nothing to post on Craigslist while newspaper ads can be very costly.
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About the Author
Keith Patrick has been writing online since 2008. His articles appear on Patch.com and various other websites. He is currently studying journalism and e-commerce at DePaul University in Chicago.
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Craigslist is all about no-frills buying and selling. As with any service used by millions of people, there will always be a few bad apples that try to spoil the bunch. Let's take a look at a few safety tips to help make your Craigslist experience a safe and profitable one.
Never Give Out Your Real Contact Information
Craigslist gives you the option of using your true e-mail address or using a Craigslist-provided proxy e-mail address so that you don't have to expose your true e-mail when posting an ad. It's a good idea to use the proxy e-mail as it will help keep spammers and scammers from getting access to your real e-mail address.
While the Craigslist-provided anonymous address is great for receiving e-mails, it doesn't conceal your identity when you choose to respond to someone. If you want your response to not contain your true e-mail then you may want to use a disposable e-mail address such as one from Mailinator, GishPuppy or others to conceal your identity. This will help preserve your anonymity throughout the entire transaction instead of just during the initial inquiry.
Shop Local When Possible
Craigslist recommends that you 'Deal locally with folks you can meet in person'. This is a good rule of thumb since many scammers won't risk meeting you in person and won't waste the resources needed to do so.
Never Give Out Any Personal or Financial Information
Some scammers who post job listings on Craigslist will try to get you to submit to 'credit checks' so they can steal your personal information in order to obtain credit cards and other things in your name.
Never give out any personal or financial information to anyone requesting it online via Craigslist. Always meet in person and deal in cash or use a secured/proxied form of payment such as PayPal so you don't have to reveal your credit information to the seller.
Avoid Using Money Wiring Services for Craigslist Transactions
On their Avoiding Scams and Fraud page, Craigslist advises that most anyone wanting you to use a money wiring service is likely trying to scam you. Wire transfers seem to be the service of choice for criminals (especially foreign ones) perpetrating shipping scams and other related fraud.
If someone wants to use a wire service for payment it should set off a red flag in your mind that they may be looking to scam you.
How Craigslist Earn Money
Never Buy Something Without Seeing it in Person First
People tend to trust that the picture a seller posts of an item is really the item being sold. Some sellers will just grab a picture they find on the internet because they are either too lazy to take one themselves or they are trying to conceal something about the real item being sold. Always check out the item in person before making a deal.
Always Meet The Buyer or Seller in a Public Place and Bring a Friend
For your own personal safety, always meet the buyer or seller in a public place such as a coffee shop. It's probably a good idea if you bring a friend as well to witness the transaction and keep an eye out for your safety.
Craigslist also recommends that you don't meet in a secluded place, or invite strangers into your home. Always take your cell phone along with you, and make sure to tell a friend or family member where you are going before meeting a buyer or seller.
How Does Craigslist Make Money Forbes
Remove Geotags From Pictures Before You Post them on Craigslist
Photos you take with your GPS-enabled smartphone of items to be sold on Craigslist may have the physical location of where you took the picture embedded in the EXIF metadata which is part of the picture's file header. While it's possible that Craigslist may strip out Geotag (GPS location) information from the pictures you upload of your items, you should always remove geotag information from your photos before uploading them to Craigslist.
While you can't see the GPS geotag information in the picture, thieves using an EXIF metadata viewer application might be able to read the location information hidden in the file header which can help them locate the item. Use an EXIF geotag removal app to remove the geotag information from your pictures before you post them online.
Consider Using Dating Sites For Personal Ads
We're not saying Craigslist is any better or worse than other free dating sites such as OK Cupid or Plenty of Fish but you might want to consider using sites that are specifically set up for dating because they may have more dating-centered privacy and security settings available than those provided by Craigslist.