How Do I Monetize A Classifieds Website?

I’d like to setup a classifieds website for a fairly large community. The community actually had one, but the person running it moved away and shut down the site. People keep asking for a new one so I think it’ll be a good opportunity.

My question is how can I fully monetize the opportunity. I was thinking of charging local businesses to place small ads on the site similar to your sponsors section. Any other thoughts?

There are several ways to monetize a classifieds website, and the best model will depend on the nature and size of your website. Here are some examples:

1. The Traditional Model: Classifieds emerged in newspapers and other print publications. The model was to charge people who wanted to place an ad in the classifieds (usually according to the length of the ad, with options to highlight it). This model can work on the Internet as well, but you would need to have a very specific focus and a large audience to showcase the ads, else advertisers would not get a good return on their investment.

2. The Craigslist Model: Craigslist revolutionized the classifieds industry because it created a really popular classifieds website where posting ads is essentially free. You can browse through different categories and cities, and the volume of ads you’ll find is always amazing. How do they make money? By charging money for ads in very specific categories (e.g., job postings and brokered rentals). The model is quite effective because they only charge people who have a lot to gain from using their services, and hence are willing to pay for it.

3. The Inverse Model: Depending on the nature of the ads being placed on your website you could actually make the viewers of the ads pay. For example, there are freelancing job boards that charge for people who want to see the contact information of the job seekers. The advantage of this model is that posting an ad becomes free, and it increases the overall activity on the website.

4. The Sponsorship Model: As mentioned in the question itself, another possible model is to let everything be free, while getting sponsors who want to showcase their products and services to your audience. This model works well if your website has a local focus. For instance, if the classifieds website is for your local soccer community it wound’t be hard to get a sports store to sponsor it.

Keep in mind that you can also experiment with two models at the same time, and that you can also start with one and migrate to another one over time. For instance, I would definitely start with the last model, making everything free. This is to make sure that people would join and participate on the website. Then once you reach a critical mass of users you could consider start charging for specific parts of the website.