Several billion rupees worth of used products were listed for sale in OLX and QUIKR. With 100 million plus active users, these websites are absolutely free to use. Anyone can list and sell their products for free.

Ever wondered how these websites operate for free? There is server cost, maintenance cost, internet bandwidth costs, employee salary and lots more expenses. It is true that advertisements bring in revenue. But will that be enough to run such a large enterprise spiralling several countries in the world?

Now there is a new competitor in town. Amazon owned jungle.com is jumping in to the listing business as well.

Junglee Screen Shot

To understand their business model, let us study why Amazon is converting Junglee as a “used products listing” site. Much similar to OLX and QUIKR. Needless to say, this site is also free to use.

Amazon is in the “new and good as new products” selling business. What benefit does it offer to have a “listing website”?

One word: Data

Yes, the data we provide is worth much more than the costs involved in running Junglee / OLX /QUIKR

Here is a typical example. Lets say, you list your used laptop for sale in Junglee and sell it successfully. You are technically a potential customer of Amazon.

This is how it works. Once you sell your laptop, Amazon knows that you had recently sold it and have money in hand. Lets call this “money data”. Users with money!

Now imagine this scenario, There is always a chance that you might have browsed for a new mobile phone on Amazon in the past 30 days. Lets call this “interest data”. Users with interest towards a product.

The trick is to match your “money data” with your “interest data”.

There is always a chance that a user with money would want to buy something new.

All Amazon needs to do is to send you an email with 20% OFF for the exact same mobile phone you had recently browsed and urge you to buy it in next 24 hours… Because only few are left in stock. :-) You better buy it before your money runs out.

There are two types of customers in this world: customers with interest and customers with money. A good marketer should catch one with both.

No wonder Amazon runs imdb.com and goodreads.com