Key Takeaways
Honey is an online coupon and shopping discount offering platform. It works as a browser extension as well as a mobile application. It currently has more than 17 million active users monthly and 30,000 merchant partners from around the world.
Honey makes online shopping with discounts easier for its users. Its users do not need tangling downloads or form submissions. All they need to do is to add the extension to the browsers they use. It will scrape online coupons, offers, discounts, and rewards to its users seamlessly.
Honey is still a privately held company. It has been acquired by PayPal for $ 4 billion recently. It has more than 200 employees with an estimated annual revenue of $ 100 million.
Honey earns a commission on every qualified sale through its browser extension or mobile app. The exact information on the commission structure is unavailable. However, commission on sales for affiliate brands is the highest revenue source for Honey. Its revenues in 2020 are approx. $ 100 Million Annual.
Company Profile
Let us briefly view the company profile of Honey Science Corp.
| Company Name | Honey Science Corporation |
| Website | joinhoney.com |
| Founded in | 2012 |
| Founders | George Ruan and Ryan Hudson |
| Key People | Ryan Hudson – C0 founder, and George Ruan – CEO |
| Headquarters | Los Angles, California, US. |
| Business Model | Online Coupons, Shopping Saver. |
| Products | Online Shopping Coupons, Finding Savers, Affiliate Marketing for Merchants. |
| Competitive Advantage | Unique Business Model, Fintech, Appeal to Digital Customer Base. |
| Revenue | Undisclosed – Approx. $ 100 Million Annual |
| Competitors | Savings.com, Flipp, retail me not. |
Introduction
Honey was founded in 2012 by George Ruan and Ryan Hudson. It works as an online coupon and discounts accumulator company. It works as a browser extension for most browsers including Edge, Chrome, Safari, Firefox, etc. It also works with a mobile application.
Honey partners with e-commerce platforms and merchants for offering discounts to online consumers. It makes money through a commission made from sales through its platform. That way, Honey serves individual customers seeking shopping discounts as well as merchants to increase sales. Honey also shares a portion of earned commissions with its users in the form of cashback.
Honey is still a privately held company and is currently owned by PayPal. It partners with e-commerce platforms worldwide. However, its customer base is currently limited to the US and Canada only.
What is Honey? What Does it Do?
Online consumers are flooded with ads and offers. Some others find it hard to see a discount with an ideal match for their required shopping list. Honey makes it easier for online consumers to find discounts, coupons, cash back, and rewards.
Source: joinhoney.com
Honey’s mission statement reads for making online shopping a fair experience for everyone. It intends to offer online shopping discounts, value for money, coupons, and rewards for everyone.
Honey’s popular tools have been saving finder and Amazon Best Price finder. Both tools let customers compare the lowest prices available on online shopping items.
Let us explore the product range of Honey.
Saving Finder
It is Honey’s original tool that works seamlessly for all users. Customers need to install the browser extension or the mobile app and do the online browsing as they normally do. The saving finder tool explores more than 30,000 sites to find the ideal match for online shopping customers.
Honey has partnered with more than 30,000+ merchants that help it to find the best coupons, discounts, and offers.
Price History
This tool lets you analyze the price history of an item. You can compare an item’s historic low price with its current price. It can help seasonal buyers to compare prices in peak seasons and off-seasons as well.
Honey Gold
Honey Gold is its flagship program that combines the benefits of seeking online discounts and rewards for shopping with those rewards. Honey offers a free membership program to its millions of users. It lets customers do online shopping and earn rewards called GOLD.
Source: joinhoney.com
Honey partners with leading brands to offer discounts and rewards to its customers. Customers shopping through the Honey browser extension get the rewards. These rewards can be redeemed for gift cards.
A unique feature of the Honey Gold program is its combining feature of coupons and rewards. This loyalty program automatically lets customers save by redeemed loyalty points.
Amazon Badge
Amazon badge lets users find the lowest prices available on Amazon for any item. Moreover, customers can create a price history and a droplist.
Amazon badge is specifically designed for Amazon shoppers. Customers can compare lower prices from different sellers. They can also see the price history of these items. If customers do not find an ideal product, they can set a low-price alert.
Droplist
If customers do not find an ideal product that offers discounts, they can create a droplist. It lets customers know if their selected product sees a drop in price.
Honey for Affiliates
So, how does Honey offer so many discounts and coupons on its own?
They partner with online merchants to increase their sales and conversions. It works as a win-win situation for both parties. Affiliate partners can boost sales and Honey can offer discounts to its millions of customers.
Honey – Business Model
Honey is an online shopping discount, savings, and coupon finder program. It uses machine learning tools that bring discounts from the web to its millions of customers. It works through a browser extension and a mobile app.
Honey’s business model is structured on the commission-based model. It partners with online merchants to offer discounts and rewards to its customers. Honey uses technology to gather customer preferences. It then tailors the needs of customers with online available discounts and coupons.
Honey has adopted a futuristic business model that combines data analytics and machine learning tools. It works similarly to marketing campaigns and conversion tools used by online stores. Honey also uses the same types of tools to automate the whole process of finding online discounts, coupons, and offers. In that sense, Honey has taken the Google search one step ahead with more personalized results for customers.
How Does Honey Make Money 2022?
Honey has been very transparent on how it makes money through its merchant partner programs. The discounts, coupons, and reward programs offered by Honey come through its online affiliate partner program.
Honey has a partner list of more than 30,000 online stores worldwide. Some of these stores include top brands like Amazon, Apple, Microsoft, Walmart, Reebok, Macy’s, Sephora, FedEx, etc. Honey also offers affiliate partnerships through dedicated affiliate network platforms like ShareASale, eBay, Rakuten, and Groupon, etc.
Honey earns a commission on every qualified sale through its browser extension or mobile app. The exact information on the commission structure is unavailable. However, commission on sales for affiliate brands is the highest revenue source for Honey.
Honey – Unique Selling Proposition
Honey follows a unique business idea. Online customers always wanted to see something like Honey offers. It was overwhelming to put everything on a Google search to find the best deals and lowest prices on desired items. Honey’s business idea is its biggest strength as it became the pioneer of it.
Honey uses sophisticated technology to gather information on customers’ buying behaviors. As it works as a browser plug-in, it can easily track the customers’ buying behaviors. That’s valuable information for any business.
Honey has quickly established brand recognition and partnered with more than 30,000 online stores. It has expanded its customer base to more than 17 million. Thus, its large customer base and expanding network of affiliates are important USPs.
Honey- Revenue and Market Capitalization
Honey was acquired by PayPal for a whopping $4 billion. It remained a privately held company since its inception in 2012. Before the acquisition, Honey had received total private funding of $31 million.
Honey’s estimated annual revenue stood at $600 million before acquisition. It is expected to grow since it has become part of PayPal.
SWOT Analysis of Honey
Honey has several strengths in the form of its business model, technology, customer base, and so on. It faces growing competition and threats as well.
Let us briefly explore the SWOT analyses for Honey.
Strengths
Honey was acquired by PayPal for a staggering $4 billion last year. It means the company had several strengths and key future opportunities that a leading online payment solution paid that much for.
Here are some key strength points of Honey:
- It has an established history of offering online discounts, coupons, savings, and rewards to its loyal customers. Brand Recognition is its prime strength.
- It has a growing affiliate network of 30,000+ online stores with an average monthly customer base of 17 million.
- It remained profitable even before its acquisition by PayPal.
- It enjoys the largest market share in its business category as a market leader.
- Honey follows a futuristic business model of automation and machine learning.
- Honey has secured its financial position for a foreseeable future with its parent company being PayPal.
Weaknesses
Like every other business, Honey has its weaknesses as well.
- Honey offers services to the US and Canada customer base only.
- It remained a privately held company despite huge success and profitability.
- Honey relies too heavily on social media marketing platforms such as YouTube.
- Relatively modest online store partnerships after 9 years of business history.
Threats
Every business is prone to business and economic threats. Online businesses and tech firms like Honey are no exception to that as well.
- Honey is facing increased competition from established market players like Amazon Assist and its direct competitors like RetailMeNot.
- It faced criticism on its customer privacy concerns.
- With an established business idea, it’s easier to face new market entrants anytime.
- Honey could face stern competition or disunion from its biggest partner network like Amazon. Amazon did advise its customers to uninstall Honey.
- Like other businesses, Honey could face economic and market risks as well.
Opportunities
Successful businesses turn their weaknesses into strengths and threats into opportunities. Honey has done it successfully so far. Yet it has some opportunities that can further boost its performance.
- Global Expansion beyond the US and Canada market can be its top priority.
- Honey can expand its affiliate network by taking advantage of PayPal’s gigantic partner network base.
- It can now expand its customer base with PayPal’s millions of online customers worldwide.
- For a growing company like Honey, disunion from its parent company and going public can be an option too.
- Honey can improve on its product range with better offers and reward programs.
- It can improve marketing strategy beyond reliance on social media marketing.