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Why Letgo's Business Model is so successful?

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Letgo’s Company Overview


Letgo is a fast-growing mobile marketplace that allows users to buy and sell items locally. Founded in 2015 and headquartered in New York, Letgo has quickly become one of the largest and most popular apps of its kind, with millions of users across the globe. The company's mission is to create a sustainable and efficient platform that promotes a circular economy, enabling people to give a second life to their items while reducing waste. Letgo's easy-to-use interface, combined with its innovative image recognition technology, makes the process of listing and selling items straightforward and hassle-free. Letgo's business model is centered around facilitating peer-to-peer transactions within a localized setting. Users can list items for sale, browse available items in their local area, and communicate directly with sellers or buyers through the app. The platform is free to use for basic transactions, which has significantly contributed to its rapid user growth. Letgo monetizes its platform through a freemium model, offering additional paid features to enhance the user experience. These features include bumping listings to the top of search results and featuring listings to increase visibility. Furthermore, Letgo also generates revenue through in-app advertising, partnering with various brands to display targeted ads to its user base.

https://www.letgo.com/

Country: New York

Foundations date: 2015

Type: Private

Sector: Consumer Services

Categories: Internet


Letgo’s Customer Needs


Social impact:

Life changing: affiliation/belonging

Emotional: fun/entertainment, provides access, design/aesthetics

Functional: simplifies, makes money, connects, variety


Letgo’s Related Competitors



Letgo’s Business Operations


Classified advertising:

Classified advertising is most prevalent in newspapers, online publications, and other periodicals that may be sold or given for free. As a result, classified ads are much less expensive than more prominent display ads companies use, even though advertisements are more prevalent.

Advertising:

This approach generated money by sending promotional marketing messages from other businesses to customers. When you establish a for-profit company, one of the most critical aspects of your strategy is determining how to generate income. Many companies sell either products or services or a mix of the two. However, advertisers are frequently the source of the majority of all of the revenue for online businesses and media organizations. This is referred to as an ad-based income model.

Customer relationship:

Due to the high cost of client acquisition, acquiring a sizable wallet share, economies of scale are crucial. Customer relationship management (CRM) is a technique for dealing with a business's interactions with current and prospective customers that aims to analyze data about customers' interactions with a company to improve business relationships with customers, with a particular emphasis on retention, and ultimately to drive sales growth.

Barter:

Without currency, it is a kind of trading in which products or services are traded. Typically used during periods of high inflation or scarcity of money, barter has become a popular method of negotiating agreements such as offers to purchase excess products in return for advertising space or time. With the introduction of the internet, bartering shifted from a largely person-to-person transaction to a primarily business-to-business one, where every day, commodities ranging from manufacturing capacity to steel and paper are bartered across international boundaries.

Collaborative consumption:

Collaborative Consumption (CC) may be described as a collection of resource circulation systems that allow consumers to both get and supply valued resources or services, either temporarily or permanently, via direct contact with other customers or through the use of a mediator.

Digital:

A digital strategy is a strategic management and a business reaction or solution to a digital issue, which is often best handled as part of a broader company plan. A digital strategy is frequently defined by the application of new technologies to existing business activities and a focus on enabling new digital skills for their company (such as those formed by the Information Age and frequently as a result of advances in digital technologies such as computers, data, telecommunication services, and the World wide web, to name a few).

Two-sided market:

Two-sided marketplaces, also called two-sided networks, are commercial platforms featuring two different user groups that mutually profit from the web. A multi-sided platform is an organization that generates value mainly via the facilitation of direct contacts between two (or more) distinct kinds of connected consumers (MSP). A two-sided market enables interactions between many interdependent consumer groups. The platform's value grows as more groups or individual members of each group use it. For example, eBay is a marketplace that links buyers and sellers. Google connects advertising and searchers. Social media platforms such as Twitter and Facebook are also bidirectional, linking consumers and marketers.

Technology trends:

New technologies that are now being created or produced in the next five to ten years will significantly change the economic and social landscape. These include but are not limited to information technology, wireless data transmission, human-machine connection, on-demand printing, biotechnology, and sophisticated robotics.

Online marketplace:

An online marketplace (or online e-commerce marketplace) is a kind of e-commerce website in which product or service information is supplied by various third parties or, in some instances, the brand itself, while the marketplace operator handles transactions. Additionally, this pattern encompasses peer-to-peer (P2P) e-commerce between businesses or people. By and large, since marketplaces aggregate goods from a diverse range of suppliers, the variety and availability are typically greater than in vendor-specific online retail shops. Additionally, pricing might be more competitive.

Peer to Peer (P2P):

A peer-to-peer, or P2P, service is a decentralized platform that enables two people to communicate directly, without the need for a third-party intermediary or the usage of a corporation providing a product or service. For example, the buyer and seller do business now via the P2P service. Certain peer-to-peer (P2P) services do not include economic transactions such as buying and selling but instead connect people to collaborate on projects, exchange information, and communicate without the need for an intermediary. The organizing business provides a point of contact for these people, often an online database and communication service. The renting of personal goods, the supply of particular products or services, or the exchange of knowledge and experiences are all examples of transactions.

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