This article is for those who want to create a peer-to-peer website classified website like OLX, where any user can create an ad for the sale of their goods and services. The site is used monthly by more than 200 million users from 40 countries who conduct 8.5 million transactions, making OLX one of the largest online message boards in the world.

Step-by-step guide consists of five steps.

Step 1: Looking for an Empty Niche

On the OLX website, you can buy or sell anything from used videos to luxury real estate on an artificial island Jumeirah in Dubai. The site can also be used for job search, sales of services and crowdfunding. That is, OLX is a multi-purpose market.

By creating your site like OLX, you can follow a similar path if your classified website is focused on a region where there are no competitors. There are very few such countries (Syria, Libya, Iran, North Korea), and all of them are not yet suitable for starting a business due to the difficult political and / or economic situation. Therefore, it is better to use a different strategy - choose a niche with low competition.

Targeting a specific niche will allow you to work with a narrower target audience (people who are interested in specific categories of goods and / or services), so you can develop designs and functions targeting your chosen target audience, which will increase website clickthrough rate (CTR), user engagement and will make marketing more effective overall.

Here are some examples of promising niche markets:

1. The Etsy marketplace operates in this niche, but it is popular mainly in North America. In other regions, as a rule, there are no large analogues of Etsy, so people use multipurpose markets to sell their products. You can play on it by creating a niche project.
2. Organic and natural beauty. Focusing on products such as natural face masks, body scrubs, deodorants, etc., will attract consumers who care about their health. According to studies, over the past few years, there are more and more such people.
3. Vitamins and nutritional supplements. Another market that is gaining popularity due to people who prefer a healthy lifestyle. What vitamins and supplements to bet on, the Cochrane Collaboration website will tell you - the best source of information if you need to learn about the effectiveness of medicines, vitamins, nutritional supplements, as well as evidence-based and alternative medicine practices.
4. Selling books. Typically, OLX is used to sell used books, since there are very few professionally made online message boards customized to this niche in the world. Although the market itself is quite large.
5. Market of some services. This can be repair of home appliances, car rental, training (tutoring, courses, trainings), cleaning and more. The bottom line is to create a platform that will become a kind of hub for your chosen category of services.
6. Sale of mushrooms, fish, meat, vegetables, fruits, milk and other products that people themselves collect, grow or produce. In developed countries this is hardly done, but in developing countries every fifth person in rural areas earns this way (in some places this is the only way to earn money). There are no marketplaces focused on this niche at all.

You can choose a niche not only by the fact that the site will be sold, but also by the target audience. For example, you can create a bulletin board with “Everything for” products for parents, students, motorists, travelers, holidays, or pet owners. This orientation will also create a unique user experience.

Step 2: Determine the functionality

User panel. It is responsible for the interface and interaction with buyers and sellers, so when implementing it, you need to rely on a nice design and usability. User panel features include:

1. Registration / Login. Create an account and log in using email, phone or integration with social networks. If the site is focused on the sale of expensive goods and services, you need a mandatory check of mail and phone, if it is dating, vacancies, tutoring, babysitting services, etc., then it is better to introduce the mandatory profile synchronization on your site with a profile on a social network.
2. Profile setup. The ability to add a photo, personal data, address, indicate categories of interest, available payment methods, etc.
3. Create an ad. To do this, you need to implement a product card, where you can add a photo, technical specifications, a brief description, method and terms of payment, time of relevance of the announcement, contacts, etc.
4. Listing ads. Feed of current posts with the ability to filter by category, region, payment method, seller rating, price and more. Here you need a search function for keywords with filters.
5. These may be recommendations on the main page, at the bottom or at the top of the listing and / or under the product card. Ad placement in recommendations may be based on past purchases, search queries, personal data and other factors.
6. The set of ads that the user wants to keep and / or track. When implementing this function, you need to add the ability to make your favorites list public, entire or individual categories.
7. Product management. In this section, the user can manage the shopping cart and / or goods for sale. You need to implement the ability to configure notifications and confidentiality, add sales and purchases history, view statistics, and more.
8. View another user's profile. It makes it possible to view the rating, confirmation status of mail and phone, a link to a social network, a history of successful transactions, reviews and more. If there is verification, then you need a special icon in the profile for those who passed it.
9. Reviews and ratings. Help filter out dishonest users and scammers. The ability to leave feedback needs to be introduced both for a particular product, and for evaluating sellers. The ratings are usually made in the form of stars or points, which are displayed in the listing and user profile.
10. Customer support. Communication with the site administration via phone, email, internal chat, instant messengers or feedback form.
11. Internal chat. Buyer-seller communication in real time.

Admin panel. A set of tools for tracking and managing content, ads, payments and more. Requires the implementation of such functions:

1. Only through login and password. Users and ordinary admins do not have the opportunity to register new accounts. Such accounts are added by the site owner or chief administrator through a special panel.
2. A set of tools for tracking content, payments and user actions, setting up push notifications, as well as the possibility of freezing, changing or deleting monitored processes.
3. Checking user profile. The same as in the case of the user panel, only with a large amount of information displayed and the ability to edit and delete it, if there are violations of the terms of use of the marketplace or the law.
4. User management. Tracking the accounts of all users, their verification, freezing, deleting, etc.
5. Reward management. Tracking statistics and issuing rewards to referrals. This function can be made automatic, but in this case, you must leave the ability to control in case of error or hacking.
6. Integration with web services. Cloud storage, payment gateways, CRM and other third-party systems.
7. Reports and analytics.

Additional features. They are needed to improve the user experience, increase the competitiveness and uniqueness of the classified site you are creating. These may include:

1. Support for multiple languages. A useful feature if you are targeting a multilingual country or several regions at once.
2. Location determination. It will improve the listing, showing the buyers sellers in their region at first, and then the rest. Also helps fight scammers.
3. Sellers certification. Paid verification of sellers' reliability with the issuance of an appropriate distinguishing mark on the website, as well as brand identity verification (if official representatives of Nike or another brand created an account or a third-party selling their products).
4. Coupons and discounts.

Step 3: Choosing Website Monetization Models

Unlike most bulletin boards, where the site acts as an affiliate, earning a commission or listing fee, the main source of income for OLX is advertising. The site earns the most with Google Ads and individual ad promotion.

If you are creating your own marketplace website like OLX, you don’t have to stick to this particular business model. You have the right to choose from all possible methods of monetization suitable for such projects:

Post fee. This model is usually used on sites where people sell expensive goods and services, as well as on employment sites or dating sites. For example, Craigslist uses such a scheme, taking the minimum fee for placing ads in certain categories.

Monthly subscription. Users must monthly pay a certain amount for using the platform. Money can be taken both from those who publish posts (as they do on sites selling cars, real estate, land, services), and on the other hand (as they do on dating sites and wholesale markets). Some marketplaces require a subscription only for those who sell a lot. The subscription model is used by eBay, Amazon, Skillshare (training courses), Workaway (vacancies) and LinkedIn.

Google Ads and AdSense Ads. This approach implies free access to the site and the sale of some site space to third-party advertisers through integration with Google Ads and AdSense Ads. This model was chosen by OLX and Quikr, it is especially popular in new projects.

Advertisements. These can be banners on the main page, at the top of the natural listing, or in recommendations. The difference between this option and Google Ads is that such advertising is completely controlled by you and you will not share revenue with third parties (for Google Ads, this is Google).

Sales commission. The most common way to monetize the marketplace. Payment is taken only in case of a successful transaction. Money may be charged to the seller, buyer, or both. EBay, Amazon, Airbnb, Uber and most other well-known marketplaces work on this principle.

Premium features. This model implies free use of the site with the ability to connect additional paid features. For example, the removal of all advertising, a special design of ads, advanced statistics, integration with external services, storage of goods and more. This model is used by Tinder (yes, this is also a marketplace), OLX, Amazon.

It’s not necessary to use only one way of earning money; they can be combined, as OLX and Amazon do, by charging a commission from trade transactions and earning on subscriptions, premium features, advertising, etc.

Step 4: register a legal entity

In all countries, business requires registration of a small business or legal entity. The type of permit, speed and price of such a service depends on the jurisdiction, business profile and size of the business. You need to register a company in advance, so that by the time the marketplace is launched, you can immediately start a legal business.

Step 5: Choosing a Development Approach

Ready solutions. WordPress themes or free open source software will allow you to quickly create your website for minimal money. In the case of WordPress, you don’t even need to have coding or web design skills, just buy a hosting, connect and configure a theme. Such topics can be free or sold for $50-1,000.

The disadvantages of this approach are low reliability and security, the need to create technical support for third-party software, which your employees need to understand first, and the template software, it will be used by many, and therefore your website will not be unique / competitive.

White label solutions. Ready-made software with minimal setup. In fact, you just buy a ready-made service without marking, which is usually connected to a common backend. The difference from WordPress is that white label products are regularly updated and have technical support.

Cost: a subscription costing from 20 to 10 000 dollars or a one-time fee - from 500 dollars. There may be a combination: a large payment at the beginning and the ability to connect updates and technical support by subscription.

White label disadvantages:

• you cannot control the update process, even if your site stops due to this or malfunctions;
• you do not buy the functions that you need, but the entire package of functions, even if you need one or two items from it;
• there may not be support for the desired language and / or payment gateway.

Development from scratch. In this case, you or the hired developer company are responsible for the entire process of developing the site. It is longer, more expensive and more difficult, but you won’t overpay for the extra functionality, you will be able to develop a unique design and keep the copyright for the created software.

Estimated cost of creating a site like OLX is:

Note. Regardless of the development method you choose, hire programmers who will connect hosting, an SSL certificate and configure the site correctly. This is especially important if your site will be responsible for financial transactions between users.

If you plan to create a small classified website with similar features like OLX, the cost will be around $20,000 - $25,000. If you plan to launch a sufficiently functional website with a huge number of features and it should work with a lot of users, the cost can increase to $50,000 - $80,000. It all depends on your needs.

How to Make Classified Website Like OLX key takeaways:

#1. Step 1: Looking for an Empty Niche
#2. Step 2: Determine the functionality
#3. Step 3: Choosing Website Monetization Models
#4. Step 4: register a legal entity
#5. Step 5: Choosing a Development Approach