How Does Honey Make Money?

Who doesn’t like coupons and discounts? But one would feel happier if the said coupon works, right? With most of the coupons on the internet not working. Why would anybody want to purchase an item at a full price when they can get it for a discount.

Coupon codes have really saved people money, but not all the coupon sites are offering the legit coupons. Trying to find a valid coupon code is really stressful. All the coupons sites claim that their coupons will work, but that is not the case. Sometimes finding coupons become so hard that people stop trying.

But since Honey has entered the market the dynamics with coupons have changed for many people. Have you heard of Honey? Yes, then you must already be benefiting from this site. If you don’t, then today you will find out about an interesting site that will help you saving money on your purchases.

From ordering pizza to the latest smartphone with the honey app you can find the valid coupon code and save really good money on deals. Want to know more about this app, then let’s dive a little deeper.

It all started with a pizza 

Honey is a browser extension or an add-on that will search for the coupons on the shopping sites. It will save you money as it searches all by itself for the coupons. This application is available on all the major browsers. And another reason for using this app is you don’t have to spend hours going through different sites to find the coupons because while you’re shopping honey will find you valid coupons to use on that site. Simple, right?

But have you wondered what is the story behind honey, how it was started? The co-founder of Honey, Ryan Hudson has shared that while he was searching for coupon codes to buy pizza online for his children he thought that the process was not smooth, so why not automate it.

This is how the honey app was put together. But it was anything but an easy ride after that, the founders George Ruan and Ryan Hudson didn’t find any investors for another two and a half years. Hudson has gone back to work. While he returned to Honey, through a beta testing group they saw that the extension has been growing organically till it was leaked on Reddit and started to gain good traction. Since that point, this platform has seen rapid growth in the chrome store and by 2017 it has 5 million downloads. By 2020, this extension has around 10 million users.

The mission of this site is that everyone should have the information they want so that they can make better decisions with their money. They have explained it further by saying that they provide their users with tools that will help them in finding the best perks, savings. And it is easy to use and free. So they help people in spending their money with confidence.

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Honey’s worth

This company has claimed that has over 17 million trusted members across the globe have saved more than $1 billion in savings. Not only that it has offered its users with around $8 million rewards to its members.

In January 2020, Honey was acquired by Paypal for around $4 billion and paid it in cash. Paypal has said that adding Honey to their platform will help them in offering powerful tools and services to their customers and the merchants. As PayPal always comes at the time of checkout, but with honey, it can go beyond it and can enhance the shopping experience of its users. Paypal has around 300 million customers and with honey, they can gain more information about the user’s journey and this will help them in gaining an edge over their competitors. 

If you want to know more about PayPal Read: How PayPal makes money?

But with all this being said aren’t you curious about how Honey earns money? It is true that it actually helps people in saving money by finding them coupons. But how does honey make money when it is finding these coupons for free? 

Let’s find out then

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The secret of money-making

Honey is not the first one in the market to make money while offering its services for free. This revenue model gets earned from the affiliate commission. Honey is no different; it receives its earnings from the affiliate commission from the stores. Simply put, whenever payment for an item is confirmed the said store will pay small portion money its earnings. But if you think this is the only way in which it makes money then you’re wrong. Honey makes money from Honey gold too. 

If you see clearly Honey is a tool that offers coupons for the users without paying a dime. Simply put, they are giving the users information about the best price they could get this product for. And as you know, no one can resist the charm of coupons. So the users will definitely check out as they are getting a discount. So for every sale that Honey makes the shopping sites will pay them the commission. Not only that they have another source of revenue i.e, Honey Gold.

Honey Gold is also quite profitable as it brings in the money. As you see it is a membership program, whenever a user purchases items from their partnered stores, Honey will receive the affiliate commission from these stores. As it is connected to 30,000+ retailers, you can see that it brings good money. Not only that when users buy under the Honey gold program they also can redeem their gold for a gift at the partnered stores.

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Conclusion 

The six tools of Honey namely savings finder, Honey Gold, Droplist, Price history, mobile app, and Amazon’s best price are bringing in good traffic for this extension. It is an interesting idea that took form. People can find the coupons right when they’re shopping so they don’t have to go back and forth. They can buy the product while saving instantly. If you’re interested in knowing more about such business models then check out our other articles.

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