Learning a new language is always fun. But if you want to excel in learning then you must have a competent companion. Yup, having help will make it easier for you to learn quicker. It is even better if the learning is made fun. But the problem is that not everyone is financially sound. But with Duolingo people don’t have to worry about it, because it is a free language learning platform.

The reason why most people love this platform is that they make learning fun and easy. The courses in this platform are gamified so that users will stay interested in learning the new language. This app has grown exceptionally and has more than 300 Millions users across the globe. Sounds cool, right? 

Duolingo has been in the market for a long time. It was founded by Luis Von Ahn along with his student Severin Hacker in 2009. Luis Von Ahn has previously worked on CAPTCHA and reCAPTCHA. The intention behind the creation of this platform is that Luis Von Ahn has seen how expensive it is to study English for people. So with Duolingo, anybody can now learn a new language without worrying about the cost. 

Want to know more about Duolingo and its business model? Let’s dive in right now.

Duolingo Business Model 

As you know Duolingo was started back in 2009. And it has come a long way since its inception and has increased its user base too. The best thing about this platform is that the courses are gamified. This is why more and more users are highly interested in learning a new language. Duolingo is available on both browsers and mobile. It is available in all major platforms Windows, Android and IOS. Currently, this platform is offering around 98 languages. It is offering these language courses in 38 languages. 

The business model that Duolingo uses is a freemium model. Users use this platform to learn 8000 sentences and 2000 words in 30 different languages for free. Also another interesting this is that they have also been adding additional features such as Klingon and High Valyrian. 

This platform offers flashcards for that particular language making it easy for people to understand and learn it. Also, they have Duolingo Proficiency test. Simply put, you can get a certification in English proficiency by paying a minimal fee.

Since now that you have to understand the basics around this platform aren’t you curious about the concept behind it? If yes, then let’s dive in.

The concept behind Duolingo is quite similar to that of CAPTCHA and Re-CAPTCHA. As you already know Re-CAPTCHA crowdsources the words that machine cannot read. Whereas, Duolingo takes the human help to translate the particular document. Although there are translation tools, and with each passing year the better tools are coming to the market but the problem is that they dont translate the message with precision. SO they still need human intervention to make the successful meaning. The translation tools, translate from word to word but sometimes they miss out on conveying the message with exact meaning. 

This is the reason why Duolingo came into existence. Their business model was to make learning a new language fun by making the course into a game. Also, another best thing is that this app is completely free. But what users dont realize that during learning, as a part of the course they translate texts from that language which will become some other website. Wondering how will they know whether the translation is precise or not? The thing that if most people gave the same translation then it is considered as the most appropriate translation for that sentence and they will save and use it as the translated text. 

Since now that you have understood about the business model of Duolingo. Aren’t you curious to know how does this company actually make money or does it make any money? If you’re then let’s jump right into the topic without any further ado.

How does Duolingo make money?

As you see Duolingo is also based on the freemium business model. So it has ways to make revenue. But initially, Duolingo is an ad-free application and it was free. This brings us to the question, how does Duolingo make money then? 

Translations

One of the revenue sources for this platform is they translate the content. Yup, with Crowdsourced translation this platform translates the text for other websites or companies. This is one of the major sources of income for this platform. You see the companies can get their text translated at a cheaper rate when compared to a professional whilst getting an adequate translation. It is a win-win situation for users, companies and the platform.

This app has major clients such as BuzzFeed, CNN, etc. These websites approach Duolingo to get their text translated. As you see there are many businesses that need translations, because if they provide services in more than one country where their primary language is not English. It is better to offer a translation. So using apps like Duolingo will help them in translating with a human perspective. They dont have to worry about missing the context, etc.

Advertisements & Paid Version 

But in recent years Duolingo has started posting small, little intrusive ads in the platform. So now they are making revenue from ads too. This new addition is also chipping in to bring more revenues for the company. Also apart from advertisements it also now has a paid version. In the paid version the users will not have to worry about ads. Not only that the users can also play the games and win in-game currency so that they can unlock the courses/content beforehand. This keeps them interested and they can finish their courses faster than ever. 

English Test

Apart from all the other sources to income. This platform also offers its users an English certification test too. Yup, you heard it right. This certification test will give users with a certificate that will provide their proficiency in English. The test costs $49. The user can prove their proficiency in English with this certificate. Quite a cool idea, right? With more and more platforms like Duolingo coming into the market. One can say that it is the pioneer for such platforms. It has made learning a new language fun activity. 

Wrapping up

Duolingo has one of the best business models. It is truly the first time that someone has come up with a platform that makes learning a new language fun whilst earning good revenue from translating for other websites. Truly an ingenious idea. Dont you agree? Although it has drifted from its initial ad-free model. It is still one of the best platforms to learn new languages. Also, the users can take their English proficiency test to get a valid certificate that will prove your proficiency in the language.

Also, it is not an exaggeration to say that this business model has paved way for many other crowdsourcing information models. Cool, right? Are you interest in this business model and want to learn more about other such business models? Then check out other business model articles in Postling. You will be able to learn about business models of many businesses and how they make money. 

Are you dreaming of running an online business? Don’t have enough knowledge of building a website? Looking for assistance to grow your online business?

No more worries!!! 

Switching to an e-commerce solution is the right option for you. The million-dollar question is what is the best e-commerce solution available in the marketplace? Because choosing the right platform can be difficult for beginners. Since there are many things to consider designing a website, processing payments, SEO, shipping and a lot more.

For sure, Shopify is expertise in most of the areas.

What is Shopify?

Shopify is the leading e-commerce website around the world. Anyone can set up their online store without hassles and sell their products or services locally and globally. Merchants can sell their products or services in person through Shopify POS. Many people are unaware of Shopify POS, it’s an application that will allow merchants to sell their products or services offline. It means merchants can sell at physical stores or trade shows via Shopify POS. Also, Shopify is offering excellent features for all its users from newbie to experts.

Shopify is a popular platform that is designed for all-size businesses. No matter whether you’re running a start-up or large business, Shopify is a good option for you. The best part of Shopify is merchants can sell their products or services online or on social media platforms, in-store or out of your car – Shopify has got you covered. Sounds amazing right!!!

Many merchants are using the 14-day free trial to test Shopify on their website. During the free-trial merchants can build their website and make their sales effectively. Then merchants will switch to the premium plan to make their earnings double.

History of Shopify

Currently, Shopify is a well-known e-commerce platform in the market. Earlier, Shopify has begun as e-commerce itself. It was founded in 2004 as the initial name was Snowdevil. Shopify was founded by Travis Hutke. The entrepreneur got frustrated by looking at the e-commerce platform features and options. Therefore he decided to create a software that is flexible and easy for anyone to build and manage an online business. Finally, he launched the software in the year 2006.

Shopify has become one of the best and leading tools. The company has earned $470 million in Q2 2020, a 47% increase in growth when compared to 2019. Shopify powers more than 1 million businesses in over 175 countries. The platform is trusted by popular brands like Allbirds, PepsiCo, Gymshark, and Staples.

Shopify mission

In their words “Shopify wants to make e-commerce better for all the people around the world”. They believe that their company will help merchants of all sizes, right from small business to large enterprises.

The company concentrates mainly on small and medium enterprises by offering multiple subscription services. The most popular subscription plan is $50 per month. However, enterprise accounts are also generating good income to Shopify.

Shopify business model – Explained

Shopify investors have seen good growth. They have received immense growth in their stock in 2017. Double growth in 2017 and triple growth in 2020. Sounds amazing right!!! Shopify is offering its services to its customers at the lowest price i.e $29 per month, then how does Shopify is making money? Let’s discuss in detail

How does Shopify make money?

Shopify is a leading e-commerce destination enabling merchants to build websites and sell their products or services through a subscription fee, and additional features or services that are offered by the platform.

More than 1,000,000 businesses in over 175 countries across the globe have made more than $200 billion USD in sales through Shopify.

Shopify is offering excellent services for a portion of the cost when compared to receiving these services from third parties. Let’s consider, Shopify is offering hosting services in your subscription. Also, your website can have a payment gateway, blog, free domain name and other features are included.

Subscription sales

There are three subscription plans are available on Shopify.

• Advanced Shopify – $299 per month
• Shopify – $79 per month
• Basic Shopify – $29 per month

These plans are often the core of Shopify revenue. These plans are offering a 14-days free-trial program. Many merchants prefer Basic and Shopify subscription plan.

As mentioned eariler Shopify has over 1,000,000 business in 2020. Let’s consider that every subscriber will pay $29 per month. It means $29 X 10,00,000 = $290,00,000 of net profit every month. Shopify is earning $3,48,00,000 per year.

Merchant solutions

Shopify is offering merchant solutions and generating good income year over year. Did you know, merchant solutions mainly earning money from payment processing charges, financing from Shopify Capital, referral charges from partner, sales, POS hardware, Shopify fulfilment network and many more.

Did you know Shopify has its dedicated payment processing gateway? Yes!!! This could be the primary source of income for Shopify. There are three subscription plans are introduced in Shopify Payments, let’s discuss them

• Basic Shopify – 2.9% + 30 cents
• Shopify – 2.6% + 30 cents
• Advanced Shopify – 2.4% + 30 cents

These charges are applicable on every transaction processed through Shopify Payments.

According to the financial statement “Shopify Payments” is offering fully-integrated payment gateway to its merchants. It means merchants can accept and process payments online and offline. This feature is driving higher retention rate to Shopify. Also, the revenue is generated from other services such as referral fees, translation charges and more. As per research, Shopify has earned $522.10 million in 2020 through merchant solutions.

Payment gateway fees

Shopify is earning good revenue through subscription charges. On the other hand, Shopify is making income through the payment gateway. As mentioned above, the platform is offering its own payment gateway that is safe and secure. Let’s discuss how payment gateway is charging on every transaction through Shopify payment gateway

• Basic Shopify – 2.0% 
• Shopify – 1.0%
• Advanced Shopify – 0.5%

Point of sale service

Shopify is offering an excellent point of sale software service. The software is the best way to track the sales and payments that have taken place at local stores or in-stores. The POS service is offering features according to their subscription plan, let’s discuss them

• Basic Shopify – The plan includes Shopify POS app and third-party POS apps.
• Shopify – The plan is offering Shopify POS app, Register shifts, Staff POS PINs, Third-party POS apps, Store locations (1-5).
• Advanced Shopify – The service include all the features of Shopify. The store locations are upto 8.

Miscellaneous

Shopify is earning a good income from other sources. There are hundreds of themes available for free. On the other hand, Shopify is offering thousands of premium themes available on its theme store. These are used to customize the website effectively. Most of their themes are available for $180. The company is generating good income by add-ons and integrations

A technology platform

Though there are many SaaS companies are available in the market. Shopify stands out from the competition. But how? Since Shopify is offering e-commerce services and technologies to its customers. Also, enabling merchants to build their online stores with attractive catalogue, shopping cart and more. Shopify represents its platform as the “multi-talent cloud-based” service. The platform is hosted mainly on effective cloud-based servier. As per the organization, the key attributes are security, reliability, scalability, performance and deployment.

Conclusion

Shopify allows newbies to build an online website without technical knowledge. The merchant doesn’t need to worry about coding, installing software or hosting services. The company is running profits year by year. Shopify is making a good income from various segments. It includes subscription fees, merchant solutions, payment gateway, point of sale and more. Currently, there are more than 1,000,000 businesses are building and handling their sales through Shopify. It is offering excellent services, features and add-ons to the merchants in over 175 countries. The merchants have earned more than $200 billion USD in sales through Shopify. On the other hand, Shopify has generated $470 billion in revenue.

It’s no wonder that Audible has become the most popular audio books platforms in the world. 

People have become so busy with lives that books and newspapers, magazines are simply replaced by smartphones and tablets. World has completely changed to digital and hence, the digital content has grown popular. Especially, after audio books were introduced, it became easy for people to listen to their favorite books from anywhere, and anytime. 

There are multiple audio books platforms that are available for free and premium today. But Audible is unique in the industry with a large and high-quality collection of audio books and other audio content.

In fact, the platform has not only tremendously grown both its popularity and revenue in recent years, but greatly influenced the audio books industry. The global audio books market size was valued at USD 2.7 billion in 2019 according to a study. The market size might have increased multifold this year.

The growing popularity of the most trending audio books platform, Audible would definitely raise the question – how does it make money, right? So, want to know how Audible makes money? Well, let’s discuss that in this article, before that let’s see what is Audible, how it works and what is its business model. 

What is Audible?

Audible is a famous audio books platform that not only sells audio books or other audio entertainment such as radio, podcasts etc but it also produces audio originals. It features famous writers and is in contract with popular story-tellers to produce originals and entertain its consumers. Audible is available as an app for mobile users and even users can listen to content on desktops also. The company in recent days, welcomed most popular writers, storytellers, directors across the regions to produce original audio content for the platform. Audible mainly offers users with their country’s content.

However, it has all types of content the same as any media platform – comedy, fiction, romance, politics, science etc. Thus Audible is drawing the attention of users from all niches and of ages. The platform has over 200,000 audio books in which most of them are best-sellers and classics.

Like most of the companies, Audible has a story too.

Audible, originally was founded in 1997 by Don Katz and it released a portable media player, its first product in 1998.

In 2003 the company was in agreement with Apple Inc., until 2017 that states audio books is the exclusive provider for iTunes Music store.

In January 2008, Amazon, the eCommerce giant acquired Audible for around $300 million. The company never looked back since then. Within a short time, it started producing fantasy and fiction audio books. Thus it produced a large number of audio books including originals and narrations making the platform a giant library.

It is now offering users with thousands of audio books, radio programs, TV programs, podcasts, audio newspapers, magazines etc.

Read: Amazon Prime Business Model – How Amazon Prime Makes Money

Audible Features

A giant collection includes thousands of audio books, audio magazines, newspapers, podcasts, radio programs, and other entertainment content.

• Users can access Audible on multiple devices.
• Car Mode is available to make listening easy while driving
• Audio books can be downloaded and accessed offline
• Narration speed can be customized
• Audible is available as a membership plan

The membership plan includes:

• 1 Audio book and 2 Audible Originals for free every month
• Huge collection of selected free content
• 30% discount on every title

Enough said! Let us quickly jump into the Audible business model to understand how it makes money. Shall we?

Audible Business Model

Subscription Model

As you know, Audible is not available for free. Customers have to pay a monthly fee to enjoy the benefits of the platform. However, the membership comes with several perks such as tons of free content, discounts or credits and access to Originals.

Audible offers 6 types of membership plans.

• Audible Plus (0 Credits) – $7.95 per month
• Audible Premium Plus (1 Credit/month)- $14.95 per month
• Audible Premium Plus (2 Credits/month)- $22.95 per month
• Audible Premium Plus Annual (12 Credits/year)- $149.50 per year
• Audible Premium Pus Annual (24 Credits/year)- $229.50 per year
• Audible Escape Subscription – $12.95/month for standalone customers (No Credits)

Thus Audible is available in five membership plans so that users can choose based on their requirements. Say a binge audio book listener might have to take Premium Plus plans.

However, the platform only lets its consumers buy either 1 or 2 best-selling books per month. To buy extra books the members have to pay extra to get the book, at discounted prices though.

Members should use the credits before the plan expires and can access the audio books even if the plan is cancelled.

People can become members of Audible by visiting Amazon.com or Audible.com.

A la Carte Model (Direct Sales)

As mentioned above, people can also access audio books without becoming its members. Audible sells its audio books and other audio content available on the platform separately, meaning users can buy a single audio book without having to take membership. This model is known as A la Carte model, which is a very profitable business model. Because, here the company need not offer free audio books for credits or does not promise discounts. Hence, there are profits.

The prices when people directly purchase audio books from Audible without membership range around $15 to $40.

Read: Hulu Business Model – How Hulu Makes Money

How Audible Makes Money?

With its two business models – subscription models and direct sales, Audible is not only making more money, but it is adding more value to the platform by adding more audio content. Thus it is leaving its users and members with too many options to spoil. In fact, like Netflix, Audible might soon make its consumers binge-listeners. With the increasing popularity for podcasts, comedy shows, audio content from famous personalities and Originals, it is keeping its consumers for a long time on the platform.

Not only the Originals from top writers such as Michael Lewis or David Spade is beneficial to the company but the writers also. As there is no cost for print publishing, the writers or creators can gain handsome share for contributing content to audio books. Thus more and more storytellers are signing contracts with the platform. Hence, the platform is going to have an enormous collection of content for users in the coming days.

Thus, the major reason how Audible is making money is the user experience it offers. With a large collection of audio books, latest technology that keeps readers on place and high-quality content, Audible has millions of subscribers. Moreover it is attracting audiences by introducing cheaper plans such as $7.95 – Audible Plus.

No matter how many offerings does Audible provide to its customers, it is still making huge profits with its subscription model. Again, however, the more revenue is likely to come from its direct sales.

Bottom Line

Though there is a tough competition in the audio books industry with players such as Scribd, Audio books and even Google Play Books, Apple Books etc. Audible manages to make revenue more than that of its first two competitors combinedly.

Although the exact number is unknown, Audible is growing its user-base steadily from past few years. As more the customers, the more revenue, Audible is enjoying profits. Moreover, the Original content on the platform draws more subscribers doubling its revenue.

Getting things done these days is very easy compared to a decade ago. The main reason for this is the rapid development of technology. Technology has made the life of people easier than ever before. These days you can just get anything done while sitting at your home. All you have to do is have a smartphone or a laptop along with a good internet connection. That’s it, you can avail all types of services from your home. If you want to buy something all you have to do is go to an e-commerce website and order the things you need. Within a day or two they will get delivered to your home. One of the services that have become very popular in recent times is online food delivery services. When you are craving some food but don’t want to go out just place an order through your smartphone.

The rise of technology has inspired people to come up with new ways to solve their problems. If you just observe you will see that there are new startups and applications that are entering the market every day. These startups are finding solutions for problems that people didn’t realize they had. One such thing is getting your groceries delivered. No one thought that they needed an application that would help them in getting their groceries. But today you have companies like Big basket that deliver your groceries. Currently, there are applications for almost any type of service. If you want a Taxi then you can book an Uber through mobile. There are even services that will deliver your medicines. But using different applications for each of these tasks may seem frustrating. What if you could do all these using one application? Today’s article is about one such application called Dunzo.

What is Dunzo and How does it work?

Dunzo is an Indian company that has its main headquarters in Bangalore. It is purely a delivery service. Dunzo doesn’t sell any products but they will deliver the things that you need. It was founded in the year 2014 by Ankur Agarwal, Mukund Jha, Kabeer Biswas, and Dalvir Suri in Bangalore which is known as the city of startups in India. This is because many successful companies like Myntra, Flipkart, Swiggy, Big Basket, etc were founded in Bangalore. Even this was not the first startup that was founded by one of the founders Kabeer Biswas. He founded a company called Hoppr before. This company was acquired by Hike. After that happened Kabeer Biswas moved to Bangalore where he founded Dunzo. One day he had this idea in which he thought how great it would be to just get your tasks done by someone. 

It seemed like a great idea and he wanted to test it out. The idea was to assign your tasks to someone else and get them done. The initial version of Dunzo was not even a website, it was a WhatsApp service. After a little while, they started gaining users and we’re completing tasks given by them. Soon they started getting more than 500 orders every day. That’s when things started to get serious. They thought the business model is going to be a success and decided to come up with their own application. Currently, the company offers its services in eight major cities that are Bangalore, Hyderabad, Delhi, Pune, Chennai, Gurugram, Mumbai, Pune, and Jaipur. All you have to do is go to their website and place your order whether it is food, groceries, medicine, etc. They even deliver things like documents or clothes you forgot at your home.

Business model of Dunzo 

Dunzo has a simple job to do that is getting the tasks are done that are given to them by the users. Unlike other delivery services, it does not confine itself to a single task. There are a lot of tasks that Dunzo does for its users. You already know that it delivers food, groceries, and medicines. But you can also make them do other things like making them get the things you forgot at your or making them deliver a package to your friend or a family member’s house who lives in the same city. Apart from this Dunzo also acts as a bike taxi if you want to go somewhere. With one goal but several tasks, Dunzo has to be associated with people involved in various businesses to provide the services they promise. So let’s look at the important aspects of its business model. 

Merchants

Since Dunzo deals with lots of services it has to be associated with all kinds of merchants. It has to be associated with supermarkets if it wants to deliver groceries. Similarly, it also has to be associated with restaurants to deliver food and pharmacies to deliver medicine. Apart from these it also has to partner with other businesses like pet stores, meat shops, hair salons, and other businesses. Dunzo has managed to get all of those businesses on board to allow it to provide its services through its application.

It must not have been a difficult task to get restaurants and supermarkets as they are used to being associated with delivery services. But the other businesses might have been difficult as you normally wouldn’t expect service to deliver things like freshly chopped meat or pet medicine. By partnering with Dunzo these businesses will be able to sell more and generate more profit. Above all they don’t even have to wait for the customers Dunzo brings the business to them. Not only that but their businesses will also get promotions in the areas they are present at. A pet store which not many people knew about would be getting orders if people order some pet related stuff from Dunzo. 

Users

No merchant would partner up with a company if it doesn’t guarantee sales. To guarantee sales you need users who would use your app to get their tasks done. But the problem with Dunzo is also its strength which is being able to deliver anything. At first, people would be confused to know what it actually is. This is because it is a combination of food, grocery, medicine, and package delivery service which is a bit difficult to understand for the first time. On top of that, you also have other applications that can do these things. However, they cannot do two different tasks at the same time. Through Dunzo you can place an order to get your groceries and medicines delivered at the same time. 

Not only that but Dunzo is known for completing the tasks quite quickly. You can get things delivered from anyplace anywhere 24×7. This is a great thing because people don’t have to keep thinking if they could get something delivered at a particular time. All they have to do is place the order and wait till the order gets delivered. They can even see where the delivery agent is at a particular time after playing their order. Above there is no service that delivers your packages from one place to another place on demand. To acquire customers quickly it has followed the most common strategy that is followed by every new business that is giving discounts. You will find discounts on almost all things if you have recently installed Dunzo. 

Delivery partners

These are some of the most important parts of their business if they want to make money. This is because usually with delivery services you have to deliver one type of thing like food or groceries. But with Dunzo it is completely different. The delivery partner has to complete whatever task that is assigned to them. They have to deliver all kinds of things on demand. 

Another thing about being a delivery partner with Dunzo is the amount of distance you have to travel to get the job done. You have to be ready to travel to whichever part of the city when required. This is because Dunzo also delivers packages to customers. So the company makes sure that the delivery agents have all the necessary skills and equipment required to deliver the items safely. They provide them with a bag that saves the products from getting damaged. These delivery agents also get good pay because of the intensity of their work. 

How does Dunzo make money?

As you already know Dunzo is completely about delivering stuff so the way it earns money is similar to other online delivery services. Like them, it also earns money in more than one. Let’s look at the in which it generates revenue. 

Commissions

This is the most common way in which delivery services earn money. Dunzo charges a commission fee from their partners for delivering their products. The percentage of commission changes from business to business. It can be anywhere between 10% to 30% depending on the business.

Delivery charges

This is also an obvious way in which Dunzo earns money. It is a delivery service so it will charge you delivery fees. This fee depends upon the distance a delivery agent has to travel. The longer the distance the more the delivery charges. Normally it is anywhere between ₹10 to ₹50. But this does not apply all the time. Because Dunzo increases the delivery charges when the demand is high. This happens when more people from a particular are trying to avail of the delivery services for particular things. So every order that is placed at that time will have increased delivery charges. 

Conclusion

This is the business model of Dunzo. It is an on-demand hyperlocal delivery model that is gaining popularity. Dunzo is also the first Indian startup to receive direct funding from Google. There are other articles on Postling about the business models of different companies Postling. One such article is about the business model of Zillow which you can check out here. 

If you are someone who is looking forward to buying a new home or renting a new apartment then you must know how difficult it is to get a place that satisfies all your requirements. Back in the day, it was a huge task if you had to buy a new property. People had to keep looking at the classifieds, meet brokers, and do a lot of research on their own if they wanted to buy a property. This is because there are lots of things you look for in a property. Not only the property but the place where it is located is also very important. Most people who are looking for a home understand how crucial it is to get a home in a good neighborhood. This is because you don’t want to end up in bad neighborhoods where you constantly have to worry about your safety. 

This is a big concern especially for the people who have kids. They don’t want their kids to grow up and get influenced by the environment. But you have other priorities if you are a person who is single and has a job. You may want to rent out an apartment on your own or you may share an apartment with your roommate. The location also plays an important role in this but more than that it is the budget you have to rent an apartment. You don’t want to spend most of your money living in a big and costly apartment if you are single. People are more likely to live with their friends to save money. So the easiest way to find a property is using a platform that deals with real estate. Currently, there are a few popular platforms that you use and Zillow is one of them.

What is Zillow?

By now you must have understood that Zillow is a platform that deals with real estate. The best way to explain it is by taking the example of Craigslist. Craigslist was invented so that you can look for all kinds of things like jobs, properties, items for sale online. This is also a bit similar to that. Zillow is like the Craigslist list but only for properties that are up for sale or rent. Zillow is an American company that was founded in the year 2005 by Rich Barton and Lloyd Frink. Even before founding Zillow Barton was a successful entrepreneur as he was also the founder of Expedia.com which he ended up leaving in 2003. The idea for Zillow came tk him when they were searching for a new home in Seattle. They realized how hard it was to find a home through research even on the internet.

The more they searched the more frustrated they got. This is because they could not only find the required information but also because of the realtors they met. They could not find good realtors as each one of them quoted a different price for the same property so that they could maximize their profits. This encouraged them to find Zillow which would serve as the database for information regarding real estates. They have also received a capital of $32 million from Technology crossover ventures and Benchmark capital. With 72 employees Zillow released its beta version in 2006 and it was an immediate success. In fact, more than two million people visited the website in the first two days due to which the site crashed. Part of the reason for this is the feature called Zestimate. This feature allowed people to estimate the price of the property they are looking for.

How does it work?

Zillow is like an online marketplace for real estate properties. This is a platform where both businesses and individuals can list the properties they want to sell. One can access this platform using their application or through the web. On this platform, you can find any type of information that involves buying, selling, and renting properties. Not only that but you can also find information about home loans. If you are a buyer then you have a lot of options to choose from. One of them being the homes that are sold by Zillow themselves. They do this through a program called Zillow offers. Apart from that, you can also buy homes through agents or directly from the owners. 

You will also get good deals if you want to rent a property. You can simply browse through the properties that are listed for rentals or you can submit an application to Zillow. This does many things like background checks and assessing the budget speeding up the whole process. Even the sellers get multiple options to choose the way in which they want to sell their properties. They can list their properties on Zillow where its Zestimate tool assesses the price of the properties making sure that they get good profit. They can even sell their property to Zillow if they want. This happens quickly as they receive an offer within a few hours. You can even work with an agent associated with Zillow that will help you in selling your property. These agents can be photographers, inspectors, and other professionals who can help you. 

Business model of Zillow

The business model of Zillow involves a lot of people. It deals with buyers, sellers, agents, and mortgage services. The platform is free to use for buyers. It is the sellers who have to pay money for using their platform to sell their properties. But Zillow is not just one company. Over the years it has acquired a number of platforms that deal with real estate. It owns all of these companies under the name of the Zillow group. HotPads, StreetEasy, Our East, Trulia, Naked Apartments and etc are owned by Zillow. Let’s look at all the important aspects of its business model.

Buyers

What is the use of having a real estate marketplace if you don’t have enough buyers? They are the ones that bring the businesses to your website. It is because of the buyers that sellers want to list their properties on the website. So it has to provide all the things that a consumer is looking for and also the things that they did not think of. Zillow understands this and leaves no stone unturned to give them the best experience when they are looking for properties. The Zestimate tool is a great feature that helps the buyers immensely. They can know the approximate price of the property. If they want to get the property quickly they can just buy the homes directly from Zillow as it can do this through their Zillow offers the program. 

Sellers

Sellers are the ones that are the source of the revenue. Because Zillow has a lot of visitors the sellers will be able to reach out to more potential customers than usual. This is the reason they want to list their properties on the platform. But if Zillow wants to make more money they have to make sure that they sell the maximum number of properties through their platforms. So they provide them with lots of services to make it easier for them to sell the property. They will buy the property directly from the sellers through their Zillow offers. They will even provide them with agents if they want. These agents will help them in selling their properties or they can simply list their properties on Zillow. 

Agents

As mentioned earlier Zillow has agents that are associated with it. These agents can be photographers and other professionals who will make sure that the property looks desirable. They are the ones that help the buyers to sell the properties that buyers could not sell. Zillow makes sure that they get a good deal for working for them. 

How does Zillow make money?

Zillow, as you know, deals with real estate and it is an online platform so it naturally has more ways in which it gains revenue. Let’s go through them one by one. 

Commissions for selling homes

This is probably the most predictable way in which Zillow earns money. The database of Zillow consists of information about most of the houses in the US that are for sale. So a buyer can access the information about them very easily through Zillow. When the sellers are able to sell their property through Zillow they have to pay 6% as commission. 

From software tools

The company has tools that help sellers to sell their properties. These programs are called Premier Broker and Premier Agent. Both these tools help brokers, agents, and other people who work in the real estate sector to track leads, advertise services, and organize their work on Zillow. It will charge them according to the market they have. 

Subscription fees

Yes, even a platform like Zillow has a premium membership. But this is not for buyers or sellers but mortgage services. The money it makes depends on the interest that is charged by the home loan provider. Not only that but it also depends on other factors like the down payment, duration, and the amount.

Advertisements

Zillow also charges fees from real estate firms for showing their ads. It makes good money by selling advertising space on their platform. Apartments from that they also get paid for cost per click and cost per lead. 

Conclusion

This is the business model of Zillow. It is one of the most popular online real estate marketplaces in the US and it is still going strong. There are many other articles on Postling that can educate you about the business models of different companies that are popular all over the world. You can check out the business model of the Cash App here.