Honey is one of the most popular savings apps and browser extensions. It is a free app and saves people on their online purchases. But if it is free, how does Honey make money?
Honey makes money by way of commissions given to them by their merchant partners. They are given these commissions when a member uses their app to activate Honey Gold rewards or find available savings. This group works with their affiliates to help confirm their user’s purchases.
Whenever a user redeems a coupon through its app extension, Honey makes money. Member merchants pay Honey what they call an affiliate commission. The amount of the commission is a percentage fee of the sale price, the exact amount of which depends on the deal between the merchant and Honey.
Read on to learn more about how Honey earns money, what it is, how it works, and if it is really safe to use.
How Does Honey Make Money?
Honey earns money from the commissions paid by its affiliate merchants. When a consumer uses the Honey app to search for available savings or activate Honey Gold rewards, member merchants then pay Honey a certain commission.
Honey works with its member merchants to help confirm the purchases of its users, and then it gets the commissions afterward. So, when a user redeems a coupon using the app extension, the member merchants give the affiliate commission to Honey.
The amount of the commission depends on the deal between the affiliate merchant and Honey. By being a Honey user, you can save money while shopping online in different ways. It is not like other apps that earn money by selling your personal information to third parties.
Honey only makes money through the commissions paid to it by its affiliate merchants. Another thing that makes Honey different from similar apps is that it passes part of its earnings to its users. This is in the form of Honey Gold, the app’s free rewards program. It is the thing that allows Honey to give this free service to its users.
What Is Honey?
There’s a story about why they called this browser extension ‘Honey.’ It seems that it was influenced by our proclivity of asking our partner their opinion before making an actual purchase. You would usually ask: “Honey, how do these sunglasses look on me?”
Honey is actually a browser extension that automatically uses the internet to search for the best deals for its users. This company works with more than 30,000 retailers across many industries, including electronics, travel, fashion, and so forth.
Honey was founded in 2012 by Ryan Hudson and George Ruan. The company’s head office is located in Los Angeles, California. It has now grown to become one of the major players in browser extensions. In the latter part of 2019, Honey was acquired by PayPal for $4 billion in cash. It was the largest tech exit in Los Angeles to date.
What Does Honey Actually Do to Make Money?
Honey Earns Money When a User Redeems a Coupon
Honey earns money whenever a user or consumer redeems a coupon using their extension. Affiliate or member merchants then pay Honey an affiliate commission. The exact amount of the commission will be based on the transaction’s total sales price.
In other words, Honey earns a little bit every time you use its platform to shop online. Honey makes this possible by working with its member merchants to earn a commission each time they use their service to shop online.
The advertisements you see containing special codes or links that you need to click to buy refer to affiliate marketing or affiliate referrals.
How does Honey coupon make money? Every time you use that code or click that link to buy anything, the entity provided that code or link gets a small commission. Why? It is because the code or the link induced you to buy the item. That’s practically how Honey makes money.
So, Honey influenced you to buy the product. It does not matter if you are applying a coupon to a product you want already or the ad tempted you to get a new item at a certain discount. The app induced you to buy the item.
Honey App Gives Their Merchant Affiliates Proof That a Purchase Took Place
Honey gathers all the information about the sales that it makes and then provides this information to its merchant affiliates to prove that purchases indeed have taken place. The member merchants then pay Honey a certain percentage of the price. This percentage is their reward to Honey for encouraging consumers to buy their products or their services.
Commission Depend on Honey and Merchant Partner
The actual amount of commission will also depend on the deal between the merchant partner and Honey. Honey says that the majority of the commissions range from 0.5 to 10%. The affiliate commission could reach 20% for high ticket items such as expensive designer clothing.
Honey does not work directly with its affiliate merchants but what they consider as affiliate networks. These networks are like platforms that serve as entities that act on behalf of other companies. This arrangement helps in the product promotions of member merchants and also takes care of affiliate management.
Honey has developed a set of tools, all of them free, and a cashback program. These tools and incentives help the platform grow and retain members.
Honey Has a Droplist Feature
Additionally, Honey has a Droplist feature that compares various prices across Amazon’s platform. It also notifies users if a better offer is found. Honey also shares a portion of its commissions to its member users using Honey Gold, its cashback program. Users are motivated to use the Honey app more often because of these incentives.
Rival browser extensions or apps that also earn money through affiliate commission have used the same affiliate marketing strategy in the past. There are more than 20 merchant affiliates that are now working with Honey. They include ShareASale, Commission Junction, Groupon, Rakuten, eBay, and many more.
How Does Honey Work?
How does the Honey app make money? Basically, Honey does its work by scanning the web for discounts and coupons. When a Honey user who is doing some online shopping is already on their checkout process, the discounts are applied automatically towards their purchase.
One of the major benefits of Honey users is that they don’t need to spend hours searching the web to find discounts and coupons for the items they want to buy. They only need to sign up with Honey, and that is really very simple. Using the platform is also very easy.
How to Enjoy the Benefits of Honey?
You need to do these three steps to enjoy the shopping conveniences and money-saving strategies offered by Honey:
1. Download the Extension
There are many sources that you can use to download this extension. They include Opera, Edge, Safari, Firefox, and Chrome.
2. Shop Online
Do your shopping for any product that you need or want on the internet.
3. Click on the Honey Extension
When you are done shopping and are already on the checkout page, click on the Honey extension on your browser. It will find the best possible deals on the items that you want to check out. Once Honey finds the right deal, it will apply the one that will give you the highest amount of savings.
Remember, there are more than 30,000 merchant members of Honey across many industries. They include groceries, fashion, gadgets, travel, electronics, and many more.
In addition, Honey can save your selected items within its platform. Once they find a discount for those items through the Droplist feature, they will notify you. You can even compare the prices of different sellers on Amazon with this extension. In this way, you will really find the cheapest deal for any item.
Sign Up with Honey Gold
You can also sign up with their Honey Gold. This feature will enable you to earn Gold, a digital currency that you can redeem in exchange for gift cards. You can redeem said gift cards in more than 5,500 partner merchants, including Home Depot, eBay, and Microsoft.
You don’t need a desktop or laptop to enjoy the things that Honey offers. To make it even easier for you to use its service, Honey has also developed its own mobile app. It is available on iOS and Android.
Save an Average of $126 Annually
By using this service, Honey claims that you can save an average of about $126 every year, or an average of 17.9% per item if you use it as a browser extension or as an app on your mobile while doing your online shopping.
Again, how does Honey make money? Honey partners up with retailers. Then, Honey notifies its users of their partners’ promos and discounts. Once a user transacts with their partner online stores, Honey gets a commission. Honey is available on browser extensions, including Google Chrome, Safari, Firefox, Opera, and Microsoft Edge.
Short History on Honey
Googling for the best deals on a certain product or service is time-consuming. To get the best discounts or coupons, you need to view thousands of web pages. Some companies claim to give the best deals, but most of them can’t deliver what they promise.
This is what prompted Ryan Hudson to develop Honey. Ryan wanted to buy pizza for his kids, but his budget was so tight at that time. He needed a coupon to get a pizza within his budget. Ryan was about to Google for the best deals when he realized that he should develop something to do the trick and save lots and lots of googling work.
And so, Honey was born.
This browser extension or app can now do the donkey work for you. You don’t have to spend so much time searching for coupons and discounts for the item that you currently need. Just do your shopping, and at that end of the line, or the check-out page, just hit the Honey button, and you are good to go.
So, if you want to know if there’s a coupon available or a discount available for the item you are buying, click on the Honey link on your browser, and they will provide you with the best deals for that item.
Additionally, if you find yourself shopping on selected merchants, you can use Honey Gold. The items that you buy from such merchants will earn you some points. Save these points to get gift cards that you can use for shopping in the future.
With Honey You Can Save Money
It is really very easy to save shopping money with Honey. Saving money is so easy with Honey that it has now become popular among online shoppers. For this reason, the company has gotten so big that it caught the eye of one of the biggest money portals on the internet.
In January 2020, PayPal acquired Honey for more than $4 billion – with no discounts or coupons. When it comes to advertising, Honey now has a huge reach. Right now, the Honey Chrome extension has reached a staggering 10 million downloads.
Additionally, Honey was the subject of more than 160,000 reviews. The average score of these reviews is 4.8 out of 5. Together with a loyal fan following, Honey is backed up by one of the largest e-commerce platforms in the world.
For its 2018 fiscal year, Dan Schulman, the CEO of PayPal, claims that Honey was able to generate revenues of about $100 million while growing at a rate of 100 percent. The company is already making a profit.
Recently, Honey was named among the best Amazon price trackers on the internet. This browser extension now appears to be at the level of popular services such as Keepa and CamelCamelCamel.
Is Honey Safe to Use?
You may ask: “But, is it safe to use Honey?” Browser extensions, including Honey, are generally safe to use. However, there is a chance that people will abuse it. Some extensions can include malware. These extensions can also view your personal information for their own purpose.
In Honey’s case, it appears to be safe. Honey assures its users that it won’t sell their personal data to any third party.
Conclusion: How Does Honey Make Money?
Honey makes money through commissions. The commissions are paid to them by their merchant partners. They earn such commissions when a Honey user searches the internet for available discounts and coupons for available savings or uses the extension to activate Honey Gold rewards. Honey works with its affiliates by helping confirm the purchases of its users.