Honey with the domain name, joinhoney.com is the world’s popular coupon site that is known for its amazing money-saving features.
Right from buying grocery, favorite pizza to flight tickets, people do it online.
While online shopping has been on trend since many years, the importance of websites such as Honey has increased too. As said, Honey is a popular coupon site that offers money-saving coupons and deals on online shopping. It is available as both extension and app, so that once it is installed, your work is done.
The coupon code or promo code box at the checkout page on ecommerce sites, prompts users to find coupons in another tab on the browser. However, not all the times they find working or valid coupons. Hence, they waste a lot of time and lose the interest to complete the purchase most of the time.
This is where Honey, also a coupon site, stands out from the crowd. It’s founders launched Honey extension or add-on for browsers, so that users with the extension on their browser can save money on their shopping automatically. Interesting, right? So, want to know more about how Honey works and makes money while saving money for its users? Stick around…
Page Contents
What is Honey?
With over hundreds of installations on Chrome per day, Honey is a well-known name among online shoppers over the world.
It is a browser extension and an app that automatically searches coupons to help people save money on shopping. Over 10 million people worldwide use Honey as a money-saving extension on their browsers. Honey extension is available for different browsers such as Chrome, Edge, Safari, Firefox and Opera web browsers.
Honey Science Corp., is an American based browser extension that is now owned by PayPal.
Read: PayPal Business Model – How it Makes Money
Ryan Hudson and George Ruan founded Honey in 2012. Seeing the empty box (coupon code box) in the checkout page, the founders were always disappointed. They found the process of searching for the coupon codes all over the internet to just find they are not working, painful. Hence in just 6 six weeks, the self taught engineers built the website and launched in October 2012.
However, like other products, Honey has seen many ups and downs and started making profits after 3 years of its inception.
In 2017, it reached 5 million downloads. It gained huge traction after a test bug of Honey leaked over Reddit. Thus by 2020, it has over 17 million users.
On 6th of January 2020, PayPal acquired Honey for around $4 billion.
Okay, now let’s see how Honey works both for users and for itself to make money.
How Honey Works?
Let’s first see how it works for users to better understand its motives and principles.
1. Users need to install Honey Extension on their browser first.
2. For that, you need to head to www.joinhoney.com and click the Add to “browser”. Registering is not necessary to use Honey.
3. You are now ready to save a lot on your shopping.
4. Shop on any of your favorite websites and add items to the cart, but do not checkout yet.
5. Click the Honey icon on your browser’s add-ons section.
6. Click Apply Coupons. If the coupons for the store are already available in Honey’s database, it tries them and applies automatically.
7. In case, if it finds the coupons are not working, it asks you to click “Try Anyway”.
8. Honey, then takes a few minutes to find and try more codes from different sites and then applies.
9. It shows the amount you have saved. You can continue to check out then.
Okay, in short, you just need to install the add-on, click on “Apply Coupons” or “Try Anyway” to save on your shopping.
The Honey extension does the extra work for you. It finds the suitable coupon for you from different coupon sites. It not only finds coupons from over 30,000 sites, but tries those codes and applies automatically. So, it will finally get you the working coupon. Moreover, you need not enter the coupon manually. It needs zero effort from your side to save using Honey.
Read: How Swiggy Makes Money
Honey’s Features
- Savings finder
The extension finds promo codes that are suitable for your cart.
- Droplist
Add the items that caught your eyes to the Droplist, Honey notifies you when there is a price drop within 30, 60, 90 or 120 days of your choice. You can even choose at what discount you want to be notified. This feature is applicable to selected stores on Honey.
- Honey on Amazon
It compares the prices of the items you choose on different Amazon sellers. So that you don’t overspend on the item that is available for a cheaper price already.
- Price History
Honey tracks the history of prices on Amazon and shows you. You can then decide the best time to buy and save more.
- Free Money or Honey Gold
Honey Gold program is a loyalty program where the members can earn gold points (and redeem them for gift cards) whenever members shop on partnered sites. Members need to create an account and active Honey Gold to earn gold. It is completely a free and secure program.
Highlights
- Honey automatically searches and applies money-saving coupons for you
- It will show you the same product from other seller, if it is available for cheaper price
- It shows you price history on Amazon, so that you don’t overpay on a particular item that has been available for discounts regularly.
- Honey offers cashback as gold for Honey Gold program members.
- It lets you save more on the items you want to buy through Honey’s Droplist.
Okay, now you have seen features of Honey that made it the most expensive extension.
Honey Business Model
Now comes the interesting part of the article – how Honey makes money. Well, let’s quickly get into the topic.
The business model of Honey was not profitable since it hit its third year. Only in 2015, it had seen its first profits.
However, like any other coupon site, Honey generates revenue through affiliate commissions.
Let’s get into that in depth…
Honey, as of now doesn’t make money from extension according to one of its team members. But it receives commission when users make purchases with their digital coupon codes. It is partnered with many ecommerce companies, hence it receives certain commission when users from its site make purchases at the stores.
How Honey Makes Money?
Honey is partnered with 30,000+ sites, and has over 17 million monthly active users. Therefore, it is clear that it is making a good amount of money as of now. Moreover, it helped over $1 billion in savings last year. It This clearly states that Honey is enjoying benefits from its traffic.
Also, Honey makes money from its Honey Gold program. Honey Gold earns commissions when its members shop at its 4000+ partner sites. Additionally, it offers cashback to its members in the form of gold as a give away every time they shop.
Now let’s see some important milestones of Honey.
Honey had 900,000 organic users by 2014. In the same year, it raised $1.8 million in seed money. In 2016, it raised $4 million in Series A round, by October 2017, the company raised a $9 million Series B round.
In March 2017, in the Series C round led by Anthos Capital, Honey raised $26 million. It raised a total of $40.8 million in venture backing by January 2018.
In 2020, the leading online payments system, PayPal acquired Honey for $4 billion. Thus making it a billion dollars worth company within 8 years of its inception.
Is the Honey Business Model Sustainable?
As already mentioned, in no way Honey which is popularly known for its browser extension (though available as an app) doesn’t make money from extension directly. It is completely a free add-on even for its Gold members to avail any benefits. Thus the only way it makes money is through affiliate commissions from its partnered sites. It makes money from both offering coupons for over 30,000 sites and for Gold partnered sites.
As it has over 17 million members and still counting, the user-base is expected to grow even more. Hence, this way it makes enough money to manage its expenses, design and test more new features and grow.
Bottom Line
So, this is how Honey, the best coupon extension for browsers is making revenue. Hope you have understood its business model and how it makes money. The company gained and is gaining huge popularity through YouTube advertising and channel sponsorship which says that it is making the most out of today’s marketing trends. It even started “Honey Originals” to attract more and more web users, as more the users, the more profits.
