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How does Honey make money, aside from the obvious data collection? I know a few people who use it, and I've cautioned them in the past that I can't think of an

How does Honey make money, aside from the obvious data collection? I know a few people who use it, and I've cautioned them in the past that I can't think of any savory business model that would make this profitable. Is there one? Is it just tracking purchases for advertisers, or is there some other monetization strategy I'm missing? Their main site says they make commissions, but I don't know how to square that with the way consumers use it -- which is to find coupons from other sites. Honey isn't like a credit card, is it? If I'm a retailer, I don't know why I'd pay a company money for them to scrape coupons from other sites -- and it's not like Honey is going to stop scraping coupons for my products if I don't pay them money, right?

kart23 7y ago
I think honey by itself probably doesn't make much if anything. Integrated with PayPal however has the potential to become a big earner in terms of fees and new customers.
- deleted 7y ago
  [deleted]
undefined3840 7y ago
Generally these coupon sites all make money the exact same way - through affiliate programs that pay them some % of the purchase price for referring a customer to their site. Honey shares the savings with the customer.
delusional 7y ago
Supposedly they make money from referrals, so if you buy something from Amazon, they load in their referral link. From what I've heard they don't actually sell purchase data. I don't know for sure though. I don't understand how referrals are worth 4b though.
- bradlys 7y ago
  I don't think Amazon works with them anymore for referrals? Other websites might though. Rakuten/ebates works the same way. You go to a website, turn on the referral program, and then the plugin will send you a physical check in the mail once you hit a minimum amount (and it will be at most quarterly). If you have customers spend $1B+ quarterly using these plugins and you get maybe 1% cut then you're getting $10m cash/yr plus all kinds of browsing data to sell analytics on.
kevindong 7y ago
Major retailers typically have affiliate programs in which if an affiliate (say Honey) refers a customer to the retailer and the customer then makes a purchase, then the retailer will pay out a commission to the affiliate. This model is substantially similar to RetailMeNot, except Honey will automatically try every coupon they know of for you automatically.
- danShumway 7y ago
  But when does Honey ever refer a customer to a product? My impression is that you only ever use Honey when you're already about to make a sale -- you go to the product page, and Honey finds a discount for you. I'm not super familiar, does Honey run any advertisements or recommendations for products? It makes sense why I might pay a blogger affiliate revenue for referring a reader to my product, but I'm not going to pay someone an affiliate link to someone who claims they influenced a purchase decision where the customer is already sitting on the checkout page. If I go to an Amazon product page, will Honey give me a recommendation for a different product that's lower priced?
  - etxm 7y ago
    Most affiliate networks are pretty shit about tracking. Last click attribution is how it generally works. Some have started keeping track of when you landed vs when you got the affiliate link, but it’s a grey area as far as user intent. Let’s say I got to checkout and after tax and shipping the product was too expensive. I use Honey or search for a coupon and the price goes down and I complete a sale. Did the deal site offer value? Arguable.
    - dwoozle 7y ago
      That happened to me literally an hour ago. I checked out and when the shipping was added the price felt high. I left the cart open and started browsing Reddit. I was waffling on the purchase. Then I remembered to Google for coupon codes and I found one and put it in and at the new price I checked out.
deleted 7y ago
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jartelt 7y ago
I've read that part of what they do is effectively steal affiliate referrals from other websites. Say you click on an affiliate referral link from a blog that takes you to retailers website. Normally that blog would get a cut of whatever you buy at that retailer. However, if you then use your Honey extension, their affiliate link takes over and gets credit for the sale. Honey can then give you a small discount that is a portion of their affiliate commission. In some sense Honey can steal the affiliate commissions from blogs and other websites since you use Honey right before the sale.
- bowmessage 7y ago
  How are online retailers ok with this? Surely this violates referral kickback ToS or something? Doesn't seem fair to not pay the _real_ referrer that leads to a purchase.
  - jartelt 7y ago
    I imagine the retailer just cares about getting the sale and doesn't really care who they pay the 2% (or whatever) commission fee to? Shouldn't make too much of a difference whether they pay the commission to Honey or to some random blog. It certainly sucks for the blogs and websites trying to fund their content with affiliate links though. Someone like Wirecutter can spend time and money on reviewing items and then can lose out on the referral commission in the end.
    - zten 7y ago
      They do care. Some affiliate rates are far higher than that. Affiliate comes out of retailer marketing budgets. They set the rates thinking they're paying for certain types of customers from certain participants. Honey is getting paid what the retailers think it's worth - they're skeptical, but it seems to be driving incremental conversion for especially price-sensitive shoppers.
      - patd 7y ago
        Coupons affiliates typically get a lower rev share than others. It may be cheaper for retailers to have them if they don’t care about pissing off their others affiliates (most are too small to get their voice heard)
harikb 7y ago
No, Honey knows about "intent to purchase" - which is very valuable. And same intent will be sold to a million merchants even though the person will only buy from one. There is money to be made, it is theirs to lose. However, considering it is PayPal.... who knows.
tzs 7y ago
What they claim on their "About" page [1] is: > Our Business Model > We earn a commission from stores when you find savings. What we don't do is sell or share your data (you can read our Privacy Policy here) > We're building a better way to shop, one that saves you time and money, even if there's less in it for us. If this sounds like a new way of doing things, you're right. [1] https://www.joinhoney.com/about https://www.joinhoney.com/about
- dawnerd 7y ago
  In a way they did just sell all your data...
- squeaky-clean 7y ago
  They're very specific about the actual meaning of "your data". By any basic understanding of "selling your data", Honey does exactly that. > We may also share information in the following cases > with your express consent > in an aggregate or anonymized format that does not identify any specific person; These cases are ORs, not ANDs. Whenever any company sells your personal info, it's always anonymized and aggregated. I can't just buy Facebook or Google data of a specific person, and I think almost anyone would agree those companies do "sell your data." Also the 5th item in that list says they may sell your data if: > with a buyer or successor if Honey is involved in a merger, acquisition, or similar corporate transaction. If that happens, you will be notified via email and/or a prominent notice on the Website of any change in ownership, as well as any choices you will have as a result.
  - sieabahlpark 7y ago
    You can just not use the service or delete your data. It's a CA company that by law must abide by CCPA so you know your data is deleted except for regulatory purposes
    - squeaky-clean 7y ago
      I don't use the service, and for the reasons I mentioned in my comment. But saying they do not sell your data because some non legally binding webpage says so is not true and that is the point of my comment.
etxm 7y ago
Last click attribution, baby. Get those affiliate fees for 30 days after click on some sites. I worked on a competing product some years back there is much money to be had in the deal/affiliate/coupon space. Our biggest mistake was going hard on SEO. We got the google rug pulled out from under us and quickly burned all of our capital trying to do click arbitrage. Going after browser installs is a pretty ~sneaky~ savvy way to keep a user base.
willart4food 7y ago
> How does Honey make money, aside from the obvious data collection? Affiliate commission from the online vendors.
pbreit 7y ago
I don’t like to hate on acquisitions especially by smart companies like PayPal but I don’t understand this one at that price. I’ve tried Honey several times and it’s mostly annoying. I suppose one could save a buck or 2 here and there but that’s about it. And you’ll end up at a retailer with lousier total offering.
- viraptor 7y ago
  Not a huge fan of honey, but I'm happy to extract back any stupid money that went into marketing rather than the product. I saved ~$200 directly over a few months and got $100 voucher waiting. It's not a huge amount, but it's also more than pocket change. That's without actually switching retailers, just using it where I'd buy things anyway.
  - gnicholas 7y ago
    What are the privacy implications? Do they have access to your full browsing history? Or can you limit them to just amazon.com and a few other domains?
    - viraptor 7y ago
      They do have access. Whether they use it or not... not sure. It would be interesting to check. I assume everything in the same browser profile is compromised either on purpose or by accident.
- bonestamp2 7y ago
  I agree with you on the value of honey as a consumer, although I'm guessing we're not the main targets for this kind of plugin. But, I think you have to look at it from the perspective of PayPal's core business: payment services. My guess is that paypal wants honey because honey lives in the checkout of every website when the plugin is installed. PayPal can increase their own revenue by offering incentives for people to checkout with PayPal (instead of another payment service). Maybe someday they could even offer payment services on sites that don't even accept paypal, at least more easily integrate with those sites for Honey users. They could also sell extended warranties, or resell 3rd party ones as many retailers now do.
anthony_doan 7y ago
Referrals. They work with other companies, and these companies give them a unique code to apply for discount. When users use these code they get a commission. It's like CJ (commission junctions www.cj.com) that many other websites such as slickdeals uses. I used to work for one of these start up that does slickdeals like websites. They're exactly like Rakuten. You use their browser extension and they'll apply the code for you automatically. I believe all of these codes are via cookies.
gadders 7y ago
I don't know, but recently they saved me £20 on a £60 purchase, so I'm a fan :-)
Reason077 7y ago
> ”How does Honey make money, aside from the obvious data collection?” Online retailers typically pay a “referral fee” to websites that direct traffic to their store using affiliate links. There has long been a whole genre of “cashback” websites which take advantage of this by paying the referral credit (or some of it) back to the end user. This UK link lists some and explains how they work: https://www.moneysavingexpert.com/shopping/cashback-websites/ https://www.moneysavingexpert.com/shopping/cashback-websites... Honey is a bit different, because they pocket the referral fee for themselves, but attempt to save the user money by automatically checking/applying coupon codes that they scrape from the web. Honey claims they do not make any money from selling data to third parties. Honey also does not, in my experience, attempt to redirect you to other retailers as some other comments have suggested.

kart23 7y ago

I think honey by itself probably doesn't make much if anything. Integrated with PayPal however has the potential to become a big earner in terms of fees and new customers.

deleted 7y ago
[deleted]

undefined3840 7y ago

Generally these coupon sites all make money the exact same way - through affiliate programs that pay them some % of the purchase price for referring a customer to their site. Honey shares the savings with the customer.

delusional 7y ago

Supposedly they make money from referrals, so if you buy something from Amazon, they load in their referral link. From what I've heard they don't actually sell purchase data. I don't know for sure though. I don't understand how referrals are worth 4b though.

bradlys 7y ago
I don't think Amazon works with them anymore for referrals? Other websites might though. Rakuten/ebates works the same way. You go to a website, turn on the referral program, and then the plugin will send you a physical check in the mail once you hit a minimum amount (and it will be at most quarterly). If you have customers spend $1B+ quarterly using these plugins and you get maybe 1% cut then you're getting $10m cash/yr plus all kinds of browsing data to sell analytics on.

kevindong 7y ago

Major retailers typically have affiliate programs in which if an affiliate (say Honey) refers a customer to the retailer and the customer then makes a purchase, then the retailer will pay out a commission to the affiliate. This model is substantially similar to RetailMeNot, except Honey will automatically try every coupon they know of for you automatically.

danShumway 7y ago
But when does Honey ever refer a customer to a product? My impression is that you only ever use Honey when you're already about to make a sale -- you go to the product page, and Honey finds a discount for you. I'm not super familiar, does Honey run any advertisements or recommendations for products? It makes sense why I might pay a blogger affiliate revenue for referring a reader to my product, but I'm not going to pay someone an affiliate link to someone who claims they influenced a purchase decision where the customer is already sitting on the checkout page. If I go to an Amazon product page, will Honey give me a recommendation for a different product that's lower priced?
- etxm 7y ago
  Most affiliate networks are pretty shit about tracking. Last click attribution is how it generally works. Some have started keeping track of when you landed vs when you got the affiliate link, but it’s a grey area as far as user intent. Let’s say I got to checkout and after tax and shipping the product was too expensive. I use Honey or search for a coupon and the price goes down and I complete a sale. Did the deal site offer value? Arguable.
  - dwoozle 7y ago
    That happened to me literally an hour ago. I checked out and when the shipping was added the price felt high. I left the cart open and started browsing Reddit. I was waffling on the purchase. Then I remembered to Google for coupon codes and I found one and put it in and at the new price I checked out.

deleted 7y ago

[deleted]

jartelt 7y ago

I've read that part of what they do is effectively steal affiliate referrals from other websites. Say you click on an affiliate referral link from a blog that takes you to retailers website. Normally that blog would get a cut of whatever you buy at that retailer. However, if you then use your Honey extension, their affiliate link takes over and gets credit for the sale. Honey can then give you a small discount that is a portion of their affiliate commission. In some sense Honey can steal the affiliate commissions from blogs and other websites since you use Honey right before the sale.

bowmessage 7y ago
How are online retailers ok with this? Surely this violates referral kickback ToS or something? Doesn't seem fair to not pay the _real_ referrer that leads to a purchase.
- jartelt 7y ago
  I imagine the retailer just cares about getting the sale and doesn't really care who they pay the 2% (or whatever) commission fee to? Shouldn't make too much of a difference whether they pay the commission to Honey or to some random blog. It certainly sucks for the blogs and websites trying to fund their content with affiliate links though. Someone like Wirecutter can spend time and money on reviewing items and then can lose out on the referral commission in the end.
  - zten 7y ago
    They do care. Some affiliate rates are far higher than that. Affiliate comes out of retailer marketing budgets. They set the rates thinking they're paying for certain types of customers from certain participants. Honey is getting paid what the retailers think it's worth - they're skeptical, but it seems to be driving incremental conversion for especially price-sensitive shoppers.
    - patd 7y ago
      Coupons affiliates typically get a lower rev share than others. It may be cheaper for retailers to have them if they don’t care about pissing off their others affiliates (most are too small to get their voice heard)

harikb 7y ago

No, Honey knows about "intent to purchase" - which is very valuable. And same intent will be sold to a million merchants even though the person will only buy from one. There is money to be made, it is theirs to lose. However, considering it is PayPal.... who knows.

tzs 7y ago

What they claim on their "About" page [1] is: > Our Business Model > We earn a commission from stores when you find savings. What we don't do is sell or share your data (you can read our Privacy Policy here) > We're building a better way to shop, one that saves you time and money, even if there's less in it for us. If this sounds like a new way of doing things, you're right. [1] https://www.joinhoney.com/about https://www.joinhoney.com/about

dawnerd 7y ago
In a way they did just sell all your data...
squeaky-clean 7y ago
They're very specific about the actual meaning of "your data". By any basic understanding of "selling your data", Honey does exactly that. > We may also share information in the following cases > with your express consent > in an aggregate or anonymized format that does not identify any specific person; These cases are ORs, not ANDs. Whenever any company sells your personal info, it's always anonymized and aggregated. I can't just buy Facebook or Google data of a specific person, and I think almost anyone would agree those companies do "sell your data." Also the 5th item in that list says they may sell your data if: > with a buyer or successor if Honey is involved in a merger, acquisition, or similar corporate transaction. If that happens, you will be notified via email and/or a prominent notice on the Website of any change in ownership, as well as any choices you will have as a result.
- sieabahlpark 7y ago
  You can just not use the service or delete your data. It's a CA company that by law must abide by CCPA so you know your data is deleted except for regulatory purposes
  - squeaky-clean 7y ago
    I don't use the service, and for the reasons I mentioned in my comment. But saying they do not sell your data because some non legally binding webpage says so is not true and that is the point of my comment.

etxm 7y ago

Last click attribution, baby. Get those affiliate fees for 30 days after click on some sites. I worked on a competing product some years back there is much money to be had in the deal/affiliate/coupon space. Our biggest mistake was going hard on SEO. We got the google rug pulled out from under us and quickly burned all of our capital trying to do click arbitrage. Going after browser installs is a pretty ~sneaky~ savvy way to keep a user base.

willart4food 7y ago

> How does Honey make money, aside from the obvious data collection? Affiliate commission from the online vendors.

pbreit 7y ago

I don’t like to hate on acquisitions especially by smart companies like PayPal but I don’t understand this one at that price. I’ve tried Honey several times and it’s mostly annoying. I suppose one could save a buck or 2 here and there but that’s about it. And you’ll end up at a retailer with lousier total offering.

viraptor 7y ago
Not a huge fan of honey, but I'm happy to extract back any stupid money that went into marketing rather than the product. I saved ~$200 directly over a few months and got $100 voucher waiting. It's not a huge amount, but it's also more than pocket change. That's without actually switching retailers, just using it where I'd buy things anyway.
- gnicholas 7y ago
  What are the privacy implications? Do they have access to your full browsing history? Or can you limit them to just amazon.com and a few other domains?
  - viraptor 7y ago
    They do have access. Whether they use it or not... not sure. It would be interesting to check. I assume everything in the same browser profile is compromised either on purpose or by accident.
bonestamp2 7y ago
I agree with you on the value of honey as a consumer, although I'm guessing we're not the main targets for this kind of plugin. But, I think you have to look at it from the perspective of PayPal's core business: payment services. My guess is that paypal wants honey because honey lives in the checkout of every website when the plugin is installed. PayPal can increase their own revenue by offering incentives for people to checkout with PayPal (instead of another payment service). Maybe someday they could even offer payment services on sites that don't even accept paypal, at least more easily integrate with those sites for Honey users. They could also sell extended warranties, or resell 3rd party ones as many retailers now do.

anthony_doan 7y ago

Referrals. They work with other companies, and these companies give them a unique code to apply for discount. When users use these code they get a commission. It's like CJ (commission junctions www.cj.com) that many other websites such as slickdeals uses. I used to work for one of these start up that does slickdeals like websites. They're exactly like Rakuten. You use their browser extension and they'll apply the code for you automatically. I believe all of these codes are via cookies.

gadders 7y ago

I don't know, but recently they saved me £20 on a £60 purchase, so I'm a fan :-)

Reason077 7y ago

> ”How does Honey make money, aside from the obvious data collection?” Online retailers typically pay a “referral fee” to websites that direct traffic to their store using affiliate links. There has long been a whole genre of “cashback” websites which take advantage of this by paying the referral credit (or some of it) back to the end user. This UK link lists some and explains how they work: https://www.moneysavingexpert.com/shopping/cashback-websites/ https://www.moneysavingexpert.com/shopping/cashback-websites... Honey is a bit different, because they pocket the referral fee for themselves, but attempt to save the user money by automatically checking/applying coupon codes that they scrape from the web. Honey claims they do not make any money from selling data to third parties. Honey also does not, in my experience, attempt to redirect you to other retailers as some other comments have suggested.