The free Honey coupon app helps consumers discover the best deals by making discounts available to them when shopping online. If it is free, then how does Honey make money?
Honey makes a commission from their merchant partners when someone uses a coupon on the Honey app or extension. They also make money when someone uses the Honey Gold rewards program.
The Honey browser extension forms part of the affiliate advertising program of different stores, such as Target, Chegg, AliExpress, and many others. Honey works with affiliates to confirm the purchase of an item so that they get a commission from the merchant.
Read on to learn more about how the Honey app works and how it makes money.
How Does Honey Make Money?
How does the Honey Coupon app make money? Honey makes money from their merchant partners when someone uses a coupon on the Honey app or extension. They also make money when someone uses the Honey Gold rewards program.
E-commerce has advantages for both buyers and sellers. As a consumer, it’ll save you time and energy from visiting several stores until you find the one with the best deal. And as a seller, it saves you time, energy, and money from advertising and expanding your business reach.
But then again, as a consumer, wouldn’t it be even better if you always get discounts when you shop online? At the same time, as a seller, wouldn’t it be better if your customer base expands substantially because of the discounts you offer? Well, Honey can offer all these.
We have to know how this browser extension works in its entirety to answer the question, “How does the Honey app make money?” To do this, let’s start with the process of creating a Honey personal account.
How Does Honey Work?
Like most browser extensions or apps, downloading and installing Honey can be done hassle-free. It works efficiently with most, if not all, web browsers, including Microsoft Edge, Mozilla Firefox, and Google Chrome.
Similar to how you create an account for other web sites or apps, you simply input your personal information. Once done, you have to log in using your email address and password. A more convenient way to register an account is by connecting your existing Google or Facebook account. There is a specific button for this that’s one click away.
So, let’s say, you have now logged in to your Honey account. You’ll then notice additional icons on the interface of the online stores where you have existing accounts. The mobile app, however, is designed quite differently. The icons of all the affiliated online stores instead appear on the screen of your smartphone or tablet.
An E-commerce World Without Honey
In the world of e-commerce, you browse online stores one by one until you find the one that offers the best discount. Other times, you even check coupon sites until you find the best of the best. Before you know it, you already have hundreds of browser tabs opened. But once you find the best coupon, you can get an item at a discount by simply typing a coupon code provided to you.
Still a tedious process, right? But it’s not as tiring, since you can do this in the comfort of your own home–or, basically, just anywhere you may be. However, browsing over time may cause eyestrain, headache, or stiff neck.
An E-commerce World With Honey
With Honey, online shopping at a discount becomes way more convenient. There is no need to open several browser tabs to compare discounts offered by different coupon sites. When you open retailer sites using your computer, coupon codes are readily available for you.
The same thing with the mobile app–the coupon codes are there staring right back at you. So, what’s not to like about the Honey app? It’s indeed heaven-sent for online shoppers!
But, hey, online shoppers aren’t the only ones amused with Honey! Even retailers are! Retailers indeed offer their products and services at discounted rates. Does this lead to business losses? No. Why? Because doing so has even increased their sales as well as their client base. Surely, Honey is one clever online innovation.
How It Works
After installation, you’ll find a tiny “h” beside the address/search box. When you visit online stores, you’d know if Honey is affiliated with them because the “h” icon appears in orange. And just at the lower right side of that icon, the number of coupons available for the online store you’re browsing will appear in green.
The Online Stores Affiliated with Honey
Thousands of online stores have tied up with Honey, and they are from different industries. Some are online boutiques, online restaurants, including hotels and resorts, among many others.
The following is a list of online stores that have partnered with Honey:
- Pizza Hut
You may consider Honey as a consumer loyalty program in itself. But there are more loyalty programs in store for its users. They include:
- Honey Gold rewards program
- Honey Gold Bonus program
- Honey Referral Link program
To get your Honey Gold rewards, you must have shopped in at least 5,000 affiliate stores. Rewards are represented in “gold” and may be redeemed as gift cards or other items offered at the participating stores.
Honey Gold Bonus
The Honey Gold Bonus scheme was designed to offer more surprises for consumers. It’s also given from time to time. For instance, a bonus gold is given to you today for using the Honey app for the first time. Or, while browsing a particular online store, a bonus gold may suddenly pop up. So, make sure that you’re on the lookout all the time.
The Honey website features a Redemption Page, where you can redeem your e-gift card. Redemption, however, is only allowed once you’ve earned 1,000 Honey Gold. And redemption options vary, depending on which country you reside in.
Honey Referral Link
Honey has also launched its Honey Referral Link program in which you can earn 500 Gold for each successful referral. This program is monitored by letting your referral sign up through the referral link. Once he/she makes his/her online purchase with a Honey coupon for the first time, you earn 500 Gold as the referrer.
500 Gold is equivalent to US$5. If you reach a maximum of 200 people, imagine how much you can earn from it.
In order to further answer the question, “how does Honey make money?”; it’s important to understand the history of Honey.
A Brief History of the Honey Browser Extension
By now, you must be curious about how the creators of Honey thought of offering such a brilliant online service. In this case, let’s briefly talk about its history.
The idea came about when entrepreneur Ryan Hudson was ordering pizza online for his children way back in 2012. He wished there was a discount coupon he could use to save even a small amount of money. Unfortunately, there was none. And if there were, it would take a while to find one.
This experience led Hudson to create a prototype that would address his concern. He then collaborated with entrepreneur George Ruan in October 2012 to create the Honey web browser extension. The aim was to help online shoppers automatically find coupons for items they wish to purchase.
Honey may be such a smart idea, but investors thought otherwise back then. Hudson went bankrupt and had no choice but to work for an ad tech company to help him pay his monthly bills. Nonetheless, he and Ruan didn’t stop operating Honey. Hudson may not be working full-time for Honey during that time, but Ruan was. And, together, they knew that they could make something big out of it.
The Growth of Honey’s Organic Audience
Their supportive friends continued to use Honey because they find it highly useful. But thanks to a Reddit post about this browser extension, a small number of beta users amazingly began to grow an organic audience.
Today, Honey has reached over 17 million active users on a monthly basis. Its affiliation is with over 40,000 online stores. And as of 2018, it has reportedly hired more than 200 employees worldwide. Does Hudson continue to work for that ad tech company up until now? Well, make a wild guess.
In 2018, Honey was able to raise more than US$40 million in venture backing. And in 2019, it closed a multi-year partnership with the basketball team LA Clippers. This partnership resulted in the team’s training facility’s rebranding to “The Honey Training Center: Home of the LA Clippers.”
In January 2020, PayPal Holdings Inc., a company that globally runs an online payment system, acquired Honey for approximately US$4 billion.
How Does the Honey App Make Money?
We have been talking about how advantageous Honey is for both sellers and buyers. It seems too good to be true for them, don’t you think? But how advantageous is Honey for its co-founders and investors? Why do its investors agree to finance this browser extension? Is it truly profitable? Let’s answer these questions by learning how Honey makes money.
So, how does the Honey app make money? As mentioned earlier, Honey forms part of the affiliate advertising program of different stores. Honey sells its products and earns from each sale through commission. To entice more customers than any other sites under affiliate programs, Honey offers online coupons and rewards programs.
Honey is transparent when it comes to how it works. On its installation page, it states that it can “read and change your cookies, store personal browsing data on your device, and see the websites you visit.” This is common for nearly all apps.
When you click on a link from the Honey app or a browser extension, and purchase a product, the company that you purchased the product from will know you came from Honey. This way Honey will get a commission.
Conclusion – How Does Honey Coupon Make Money?
Honey makes money in the form of a commission whenever someone uses the Honey app to buy something online. They also make money when someone uses the Honey Gold rewards program.
The Honey browser extension forms part of the affiliate advertising program of different stores, such as Target, Chegg, and AliExpress, among many others. Honey offers online discount coupons to promote consumer loyalty and entice new customers.
Honey seems to be a perfect innovation for both buyers and sellers. Honey must be doing something right since it was able to close a deal with PayPal. In 2019, PayPal purchased Honey for $4 billion.