The purpose of this blog is to answer the question that is, “How does Honey make money?” Areas of focus include the history of Honey, it’s early days, what makes Honey unique in its working, and most importantly the in-depth process of how Honey makes money.
How does Honey make money?
Honey earns money through commissions from merchant partners. For example, when a user checks for available savings using honey. They collaborate with affiliates to confirm the purchase and get the commission. With every coupon applied at the time of the transaction, Honey gets a commission. There are several ways Honey makes money, which includes;
1. Displacement of Advertisements:
The more their app is being used, the greater number of clicks per ad.
2. Affiliate links:
They optimize affiliate links with the coupons so that when a user buys something, they get a percentage of commission.
3. Collaboration with Companies:
Many companies collaborate directly with Honey for promotion.
What is honey?
Honey is a software extension that allows its users to find suitable coupons. It achieves the former by tracking down discounts and coupons for the products the user ought to buy and applying them as they shop.
If you like shopping online then, you’ve likely wondered if there is a coupon that you can apply to save some cash. You google it and find that none of them are suitable for your purchase. To solve this need, Honey came about and made saving money easy.
Honey is compatible with Google Chrome, Microsoft Edge, Safari, Firefox, and Opera browsers. After you have completed the installation, you’ll be able to continue shopping on your favorite website.
During the checkout process, Honey will search for the best discount deal available on the internet and will apply the coupon on your behalf to your order. As a result, you saved time and effort by not having to search the internet for a legitimate coupon or promotional deal, and Honey received compensation for providing its free service.
Additionally, Users may also save specific products within the extension and be notified when Honey discovers a discount for that product. Furthermore, an additional plugin compares prices from several Amazon merchants and displays the best deal for every given product.
Honey not only saves money but also time spent searching for a suitable coupon. The company says that its customers save an average of $126 each year. Throughout the years, Honey has refined its products to include more unique, money-saving, easily accessible features.
Honey Gold Reward
What makes Honey unique is that they return some of the commission earned back to its users through their unique incentive system known as Honey Gold. This allows users to receive digital currency and redeem it for gift cards. Honey Gold users may redeem their gift cards at 5,500 partner stores, including Home Depot, Microsoft, and eBay. Gold points are awarded based on the subtotal of eligible purchases and do not include tax or any other fees such as shipping.
Amazon Price Comparison:
Honey compares Amazon sellers and finds similar products at a much lower price. If Honey is unable to identify a lower price, it informs its users that this is the best deal available.
Honey keeps track of the product prices on Amazon for the last 120 days. It assists users in making an informed decision about whether to purchase the product immediately or wait for a better deal.
It is a convenient service that allows you to compare costs across many stores, like Amazon and Walmart. In order to purchase a product at a reduced price, the customer can place it on a drop-list and then retrieve it later. Honey will monitor the product for 120 days and send an email to the user if the price of the product goes below a predetermined threshold during that period.
It is Honey’s most recent offering. Honey creates an instant gift card in the amount you specify, with no additional fees. This gift card, which may be purchased from Honey at a lesser price, can be used to pay for the product when the user makes the purchase.
Entrance into the Mobile Space:
After launching as a web browser plugin, Honey has now expanded its services to include mobile devices as well. Users may now add items from multiple websites to a single shopping cart, saving time and effort. As Honey points out, the extension follows you wherever the user goes.
How did Honey come about?
Honey was founded by Ryan Hudson who was instrumental in many companies as a founder as well as employees and George Ruan, who received an MBA from MIT later in life, opted for the more secure road. Hudson got the concept of Honey after ordering pizza for his family but failed to find any appropriate voucher.
The launch of the Honey did not go as planned because it was “accidentally” launched by the company after an engineer hired to aid with bug testing the technology-shared a link to the extension on Reddit. Within a year of launch, Honey has over 200,000 members and over 100 merchant partners.
At the time, the team was losing money and promoting its coupons for free. No investor was ready to invest in the organization. One of Honey’s users at Anthos Capital, a Silicon Valley startup capital firm, raved about it to managing partner Bryan Kelly. Anthos went on to invest in Honey early on. This reliable cash flow stream enabled Honey to grow to hire and obtain various merchant agreements. Honey raised $49 million in its early phases from investors like Anthos Capital, Plug & Play, and Cendana Capital.
How does Honey work?
Collaboration with Affiliation platforms:
Honey does not have any direct relationships with the stores. They collaborate with a variety of affiliate marketing networks. Honey is now collaborating with over 20 affiliate marketing platforms. Big firms like eBay, Pepper jam, Impact, Rakuten, Groupon, Commission Junction, ShareASale, and many more.
Every time a buyer purchases a product using Honey’s extension, Honey receives a commission from the store. According to the company, it obtains a commission from its partner merchants ranging from 0.5 percent to 10 percent. It charges up to 20 percent commission on high-end purchases, such as a luxury item.
Honey’s success is dependent on the success of its partners. As a result, it enjoys a positive mutually beneficial relationship with all its partners. There are two methods by which members can contribute to Honey’s profit-making efforts. That is when the app is used to identify savings during certain hours, and when the Honey Gold awards are enabled.
Consequently, the affiliate working with Honey and the online business must notify Honey, most likely through automation, that a sale has occurred as a result of the transaction.
Honey offers Coupon extensions:
Coupons are Honey’s primary product offering, and it’s an ingenious marketing tactic because the coupon has been in existence since 1887, demonstrating that it has endured the test of time. For coupon extensions to generate revenue, Honey Gold, which effectively offers users payback as an incentive for their loyalty, must be used.
Positive word-of-mouth and electronic word-of-mouth follow, as does lower turnover and an overall increase in brand awareness. Honey’s potential to continue generating money is enhanced because of all of this. Moreover, there are free tools that serve as different value propositions, helping Honey to attract an even greater number of customers.
Introduction of Honey PayPal Acquisition:
Honey had grown from a little startup to a company with a multibillion-dollar market capitalization. With time, it developed into a distinct company that was able to establish itself as a competitive player. Things began to move forward, and Honey began to make revenue as a result. Investors flocked to the firm because of the success of its business concept.
Honey attracted so much attention because of its unique reward system that PayPal decided to pay $4 million to purchase it. The reason PayPal purchased Honey was that they did not have many options to obtain information from users. A browser plugin known as Honey tracks and collects information about the purchase habits of consumers. PayPal will be able to gather more information about its users with the use of this information. This helps them gain a better understanding of what people appreciate and dislike.
Offers Honey branded coupons:
Honey brand coupons with the honey brand are those that Honey delivers to its customers in exchange for the lowest costs.
A Honey Branded Coupon can be generated by a partner business to encourage consumers to make a purchase. To take advantage of this offer, customers must use Honey’s Savings Finder, which will automatically apply the Honey Branded Coupon throughout the shopping cart checkout process.
What makes Honey Unique?
1. You are not required to register with Honey to receive coupons.
2. In exchange for signing up for Honey, you will be able to receive additional cashback.
3. Honey can be used in collaboration with other add-ons, such as Ebates, to help you save even more money.
4. If you have your own promo code, you may enter it as well.
This blog post addressed the topic, “How does Honey make money?” We discovered that Honey makes the majority of its money from affiliate marketing programs, collaboration with businesses, and advertisement placements. The blog detailed the features of the company that distinguish it from others, as well as how the company produces revenue. Please feel free to comment on the content or ask any questions in the comments section below.
Frequently Asked Questions (FAQs): How does Honey make money?
Does honey steal your information?
To give users of Honey a better online shopping experience and to assist us in developing, improving, and selling our services, they collect information from them. However, Honey does not keep track of users’ search engine history, emails, or browsing on any website that is not a retail website, according to the company.
How does honey find coupons?
Honey searches the most popular shopping websites for suitable discount codes depending on the products in your shopping cart. If honey finds any valid codes, it will automatically input them, saving you the time and effort of having to search for and manually enter the codes yourself.
Does Honey track you?
Honey does not keep track of your search engine history while you are using the app. That means Honey will reveal your information if it is necessary to complete your transaction, with businesses that assist them in operating Honey, or if they are required to do so by law.
Is honey free?
Honey is a free browser extension that checks the internet to find the best deals and discounts available. For this purpose, about (Madhav, 2021) (Dwivedi, 2021)30,000+ prominent sites are searched for and evaluated for applicable discount coupons at the time of purchase.
How does Honey work?
Honey earns money through commissions from merchant partners. For example, when a user checks for available savings using honey. They collaborate with affiliates to confirm the purchase and get the commission. With every coupon applied at the time of the transaction, Honey gets a commission.
What does Honey get out of it?
Honey collects information about you, such as your order history and goods you’ve saved. However, while Honey does gather information, it is information that is intended to improve its own service, such as which recent coupon codes were successful on which websites.
Dwivedi, C. (2021, September 1). It’s Free but then how does Honey make money? Retrieved from The Strategy Story: https://thestrategystory.com/2021/09/01/how-does-honey-make-money-business-model/
Madhav. (2021, June 13). Honey Business Model | How Does Honey Make Money? Retrieved from seoaves.com: https://seoaves.com/how-does-honey-make-money-honey-business-model/