Insights for Entrepreneurs

A Quick Guide to the Online Classified Business Model

Glory Simmons

Insights for Entrepreneurs · 6 min read

online classified business

6 min read

Classified Ads websites are helping many small businesses to post free classified ads and get their brand to reach their audience easily. With a single entity, sellers and buyers get connected and can sell and buy products or services that are locally available.

The classified platform is well-customized and organized which will help users easily search and find products or services by getting into relevant categories. By seeing the popularity of the online classified business, every aspiring entrepreneur started searching for a ready-to-use classified script, and some even plan to start a classified website from scratch.

Online classified business: Trends

You may be curious to know more about online classified business models right now. But before that, you need to know the latest trends in this classified industry that will help you to focus more on the business model to choose for your online classified business.

Mobile advertisements

By 2027, it has been projected that 54% of online classified business revenue would be generated through mobile devices. The rise in the use of mobile wallets is one of the key drivers and this is going to help online advertisers promote their brand by giving more offers for users paying through wallets and can expect some unbelievable turnover.

Enhanced videos and images

Buyers get more information about the product or service when they are described in the form of a video or an image. When we take the real estate industry, 84% of buyers have admitted that they would prefer a property that doesn’t have any images or videos on the website. This shows that ads that contain videos and images have a better conversion rate.

Online classified business model transition

There is a tremendous change in the business model of classified websites in recent days. It is not just allowing sellers to post their ads and earn profit from them. Online classified businesses have started adopting multiple marketplace business models that will let the admin earn commission from each sale, subscription fee, membership fee, and many more.

Utilizing Big Data

Big Data has become one of the most important considerations in the online classified industry. With this advanced data-driven technology, advertisers can easily analyze their target audience, forecast customer behavior, and many more aspects can be determined. Every online classified business website collects users’ information at the time of registration and the data is going to be well-used in the future with the help of Big Data.

Adopting Artificial Intelligence

Corporations have started to invest more in AI technology in recent days. Artificial Intelligence has more to contribute in escalating classified businesses. For eg. In job classified business, AI can easily identify the right candidate who will suit the job position. It can go through the resume and can check the qualification, experience, and many other factors and will get us the best candidate in seconds. AI can also be used as a span detector and can protect your classified website from spam and other cyber-attacks.

What are the common online classified business models?

The business model concerns the main aspects of the business. If you plan to start a classified website then you need to choose the right business model which will determine how you are going to deliver your service to customers, how will you bring revenue and what are the sources of revenue, and many more.

Transaction-based online classified business model

This is the classic way of bringing revenue to the platform. The admin can directly sell his product or service to the end-user who can be a company(B2B) or a consumer(B2C). the admin can set the margin for the product/service and can get profit by selling them.

Admin can follow different pricing tactics to sell his product or service. If the product is software, then he can charge a one-time license fee, or users can be allowed to subscribe to the software package and renew it periodically, or even they can pay whenever they use it.


The admin of the classified business portal will get complete control over pricing.


The admin needs to handle the financial sales pressure as the product is directly sold to the end user.

Advertisement-based online classified business model

This is one of the best online classified business models that is being used for more than a decade. You can sell ad spaces from your classified website and can let any third-party advertisers post their ads in those spaces.

The advertisement charges can be set by the admin of the platform and advertisers can negotiate the price with the admin and finalize the price. The ad space will be given for a certain period. Once the period ends, the advertisers cannot use the space.


There is a strong demand for advertisement spaces and you can charge well from advertisers.
This will increase your website traffic instantly and also organically.


This is a secondary revenue stream and you cannot let advertisements of third-party users distract your audience and get landed on their pages.

online classified business

Commission-based online classified business model

This is one of the common online classified business models that are comfortable for both the admin and the seller. Whenever the seller sells any product through the classified platform, he needs to pay a commission to the admin of the platform.

The admin can charge a flat rate for all sales that happen through the platform or can fix the price according to the product or service value, or even can have a tiered commission where he can set a slab for transaction value and set commission accordingly.


You can easily predict the revenue as you are aware of the transaction made through the platform.


When the commission is low, sellers will be ready to pay. But if the value is high, they will hesitate to pay.

Affiliate online classified business model

This model functions similarly to the commission-based business model. But the only difference, instead of selling a product directly to the customer, an affiliate will support in promoting the product and will direct all buyers to the product owner’s website.

A deal will be made between an affiliate and the supplier of the product. An affiliate can be a company or any individual who will recommend the product or service to end users. As per the sales value, the affiliate can earn a commission.


Without much investment, you can get huge website traffic as the affiliate will divert all users to your platform.


Affiliate programs are not quite appreciable as the affiliate will be getting a very meager amount as commission.

online classified business

Get expert support from Appkodes

Many leading online classified portals like Letgo have succeeded and grown steadily in the market. The competition is fierce and beating them and acquiring customers for your online classified business is a challenging one.

Do not get panic about your competitors. utilize our Letgo Clone or Hire an experienced team of developers from Appkodes and build your tech-driven classified ads business website and have a unique way of addressing the demanding industry.

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Glory is a creative content writer whose writing has a deep connection with users and can provide SEO-friendly tech-driven content. Being a freelance content writer, all her writings meet the demands of any online business, solopreneur, start-up, and brand.