Admit it, we often look for the most discounted deals whenever we shop online. Since brand new items cost a lot of money, sometimes buying second-hand products is the most cost-effective option.
eBay was the first platform to offer online classifieds and now many such platforms have emerged. Wallapop has made buying or selling used products extremely simple for the common man.
Wallapop primarily makes money through ad revenue and sponsored listings from the sellers. They also offer value-added services such as Wallapop Shipping and Wallapop Premium to earn additional revenue.
Wallapop provides a smartphone app to enlist and sell second-hand goods. This Spanish app has become extremely popular in Spain, the UK, Mexico, and the USA. Since it allows users to use the platform for free, you must be really curious to know about the Wallapop Business Model.
Continue reading to learn how this Spanish startup makes money with the classifieds.
What is Wallapop?
Wallapop was established in 2014 as a platform for exchanging second-hand products. It is essentially a classified listing platform and serves as a marketplace to trade used goods.
Wallapop was an infant back in 2015, but it was listed as the highest revenue-generating startup of its time! Transactions on this platform had crossed $1 billion during 2015 alone. No other startup had shown such rapid growth and that’s how Wallapop became the center of attraction.
Most users use Wallapop to sell used items, but it also allows selling new products. Many buyers hunt for new and unopened products (even the ones with the seal intact). They often find such goods and therefore they revisit Wallapop time and again.
The number of active users on this platform has grown pretty rapidly. Recent statistics from the company show that over 30 million people have used this platform at least once. Those users have traded over 3,523,489 products using the Wallapop app. And these figures are increasing pretty rapidly as this app is reaching new regions.
Founders Miguel Vicente, Agustín Gómez, and Gerard Olivé had created Wallapop with a vision to take the local flea market online.
They wanted to entertain smartphone users, who were looking for affordable deals on household items and other products. The initial version of this application was called Fleaster, but later changed to Wallapop.
Today, Wallapop is serving in numerous European countries and it continues to grow as the best platform to find affordable goods.
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Wallapop History
Agustin Gomez had the vision to prepare a unique platform that users can use to buy and sell second-hand goods. He is currently the co-founder and the CEO of the Wallapop Company.
He used his famous geolocation system to assess the distance and location of users. Thus, he created an application that could bring buyers and sellers from the selected region together online.
This application was introduced in 2013 when there were not many apps in competition. Users could easily find the required goods from local sellers and get those goods delivered to their location.
What people liked about Wallapop is that it was recommending products from the local sellers. Many users in Barcelona and other parts of the country downloaded this app and used it enthusiastically. Users could bargain and get the best possible deal on the chosen products.
The new geolocation system had helped this application find new users pretty rapidly. Other companies also followed the same methods, but none of them could beat Wallapop. This company had gained about 100 million Euros in revenue within five years.
It had merged with Letgo in 2016, but that merger did not affect Wallapop’s reputation. It’s the first Spanish startup to gain $1 billion in revenue and it may soon break several other records.
How Does Wallapop Make Money?
Wallapop invites all the potential buyers and sellers on its smartphone app. Users can list their products for free and sell them without any trouble. Buyers also pay the negotiated price of the product.
So, how does Wallapop make money when it is offering a free platform to buy and sell goods? It has two ways of generating revenue:
- It allows sellers to place ads for their products and sell the targeted item quickly.
- It offers additonal value added services like Wallapop shipping (for shipping the goods transacted on the app)
Ad placement is the most recent feature introduced by this platform. Product ads are placed between products buyers are looking for. These ads appear in the form of images and many brands or vendors use these ads to gain more clients.
They earn the maximum revenue from special ads like “highlight it in your neighborhood”. It features your product at the top of the list within your neighborhood.
Even though the company has not revealed its revenue from ads, experts believe it generates millions of dollars of revenue through ads. Wallapop’s market value has crossed $1 billion and ad revenue plays a vital role in this company’s success.
Wallapop has raised funding through various investors to expand the business globally. It has emerged as one of the most successful e-commerce marketplaces in Europe.
There is no wonder that it is doing well in the USA and Mexico too! It has become eBay for smartphone users, looking for cheap deals on high-quality products.
Wallapop is now promoting local businesses so that they can compete against already established brands. It is offering Wallapop Pro, which is a premium membership plan for businesses.
The pro service allows sellers and businesses to publish product ads that get a better opportunity of reaching target audiences. Many local brands and businesses are using this program to get better visibility. It is helping Wallapop generate more income, but ad revenue still remains their #1 income source.
Wallapop provides research, long-term ad placement, professional-level business profiles, and other perks with its premium membership. Therefore, it is expected that this company may rapidly increase its revenue through the Pro program.
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Why Wallapop Has Succeeded as a Classified Ad Listing Platform?
eBay was already serving in Spain when co-founders decided to introduce a smartphone app that works similarly. The popularity of eBay had forced many entrepreneurs and developers to drop the idea of competing against this e-commerce giant.
Agustin Gomez did not drop his business concept because he was familiar with the issues faced by local vendors. He wanted to take small and medium-sized businesses online and Wallapop did it.
Today, thousands of small and medium-sized businesses are using the Wallapop app to find customers. Buyers get more than 20 categories to search for new and used products listed on this platform. These categories include the following:
- Cars
- Motorbikes
- Fashion & accessories
- Motors & accessories
- Real estate
- TV, Audio & Cameras
- Cell phones & accessories
- Computers & Electronics
- Bikes
- Sports & Leisure
- Games & Consoles
- Home & Garden
- Appliances
- Movies, Books & Music
- Collectibles & Art
- Baby products
- Construction
- Agriculture & Industrial products
- Jobs
- Services and others
Whatever your demands are, Wallapop provides businesses and service providers to meet those demands. This platform helps you find local service providers, such as tattoo artists, plumbers, electricians, renovators, etc.
Users know it is a one-stop destination for buying every product or service they need. Therefore, this platform gains free publicity through its loyal users.
Wallapop Customers
The Wallapop company operates as a mobile platform where both buyers and sellers meet. It is free, but a premium membership plan has some additional perks.
Most visitors choose free service so that they avoid spending money on unnecessary items. Newly established stores and retailers choose the Pro plan to grow their business rapidly.
Wallapop’s customers can be divided into two categories, which are as follows:
Buyers
Millions of users download and use the Wallapop app to find cheap deals on a variety of products. This application has everything you need at home, office, or in your industry. The good thing is that the listed products are way cheaper than what new products cost.
People consistently hunt for new or rarely used goods on this application. Many sellers list just one or two months old products that they don’t need anymore. The prices are way more affordable than one can imagine. This platform amazes buyers with a vast collection of goods in the same category.
Buyers need to choose their city and country to find the right seller. Once all the details are provided, the Wallapop app features products listed by the local sellers and retailers. Buyers can check pictures of the listed products. Once the product is chosen, buyers can contact the seller and negotiate for a better deal.
Wallapop does not prohibit its users from sharing contact information or other details. People use this platform to find local sellers and then they deal face to face with each other.
This platform’s popularity has grown exponentially within the first five years. People were switching to this new app due to the cheap deals it was offering. Millions of people have bought goods through Wallapop and saved hundreds of dollars on each purchase.
Now, this company is available in the USA where it has gained thousands of active customers. It may become people’s first choice if it continues to promote cost-effective deals. Buyers from other countries are also offering positive reviews. Therefore, this company may soon enter untouched markets in Asia and other regions.
Sellers
If Wallapop helps buyers in finding cost-effective deals, sellers also use this platform to quickly sell their products. Local businesses face a lot of issues due to the rapid growth of e-commerce platforms.
Most buyers wait for online sales on Amazon and other e-commerce companies. They get affordable deals and local vendors face loss because they can’t try such stunts.
Wallapop offers local shopkeepers, sellers, and individual sellers to find customers for their products. This platform is empowering small and medium-sized businesses by offering them the most popular platform to list and promote their products.
Numerous small retailers are using Wallapop to find buyers looking for products they sell. Thus, they save money on expensive websites and get daily customers to increase sales.
Some people need the purchased goods on the same day. They contact local sellers, buy the required item, and get the product delivered within a few hours.
Amazon or other e-commerce companies rarely offer the same-day delivery service. Therefore, buyers turn to local retailers through Wallapop for immediate fulfillment of their orders.
Challenges Wallapop is Facing
Even though Wallapop is a classified application, it is competing against the leading e-commerce companies. Buyers constantly search for discount deals featured on their favorite e-commerce apps and websites. If buyers get a 20-40% discount on the required products, they drop the plan of buying a second-hand product.
Wallapop not only sells second-hand products but also deals in fresh goods manufactured by local brands. These brands are not as popular as multinational companies that invest thousands of Euros on promotion.
Therefore, it is a challenge for this application to draw people towards those new brands.
Final Thoughts
Wallapop has revitalized local flea markets in many cities across Europe and North America. It has helped buyers find budget-friendly products and save money on expensive items.
This startup is on the path to becoming a multinational classifieds product listing platform. It will continue to grow if sellers can provide more pocket-friendly deals.
