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PayPal to acquire shopping and rewards platform Honey for $4B

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Re: PayPal to acquire shopping and rewards platform Honey for $4B

#121

Post by lamps12 »

sparky_z wrote: post #114
mikeryan wrote: post #112

Earlier quoted context omitted.

If Honey is inserting themselves between the blogger and the seller and then pocketing the commission, how is this not “stealing/hijacking” the commission?

I have no special knowledge about Honey, but I think the distinction being made is that Honey redirects them to a _new_ seller that offers a cheaper price, essentially poaching the customer. The blog's affiliate never makes a sale in the first place so of course it never pays out. For the blog, the outcome is the same as if you took the time to price shop manually and ended up picking a different retailer. Honey's ju…

> the distinction being made is that Honey redirects them to a _new_ seller that offers a cheaper price, essentially poaching the customer. The blog's affiliate never makes a sale in the first place so of course it never pays out.

Based on what you surmised, Honey essentially acts as a middle man between two businesses. Did I get that right or am I missing something here?

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#122

Post by patd »

gamblor956 wrote: post #108
jartelt wrote: post #24

Earlier quoted context omitted.

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 i…

They don't steal affiliate commissions. They capture the most valuable sales--i.e., those made with the immediate intent to purchase--and direct those purchasers to the cheapest site in exchange for a commission. It comes down to a question of what is more valuable to the seller. The blogger may have created the intent to purchase the product but Honey created the intent to purchase from the specific seller . And to…

AFAIK, Honey doesn’t make you got to a specific seller.

They insert themselves on the cart page which is the final step of the purchase funnel when the product, the seller and the purchase has already been decided.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#123

Post by patd »

zten wrote: post #86
jartelt wrote: post #34

Earlier quoted context omitted.

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…

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.

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)

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#124

Post by BLanen »

gamblor956 wrote: post #108
jartelt wrote: post #24

Earlier quoted context omitted.

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 i…

They don't steal affiliate commissions. They capture the most valuable sales--i.e., those made with the immediate intent to purchase--and direct those purchasers to the cheapest site in exchange for a commission. It comes down to a question of what is more valuable to the seller. The blogger may have created the intent to purchase the product but Honey created the intent to purchase from the specific seller . And to…

Thanks, Honey PR.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#125

Post by viraptor »

sparky_z wrote: post #114
mikeryan wrote: post #112

Earlier quoted context omitted.

If Honey is inserting themselves between the blogger and the seller and then pocketing the commission, how is this not “stealing/hijacking” the commission?

I have no special knowledge about Honey, but I think the distinction being made is that Honey redirects them to a _new_ seller that offers a cheaper price, essentially poaching the customer. The blog's affiliate never makes a sale in the first place so of course it never pays out. For the blog, the outcome is the same as if you took the time to price shop manually and ended up picking a different retailer. Honey's ju…

No, that's not correct. You can get rewards from the page you're already on, whether it's the cheapest or not. You're not redirected and you're not incentivised to switch the retailer.

I'm getting their points from doing online grocery order directly from the supermarket site for example.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#126

Post by gonesilent »

pcurve wrote: post #19
chanchar wrote: post #2

Can someone with a better understanding of Honey's business explain why it's worth $4B?

$100mil+ in revenue. 60-70% probably goes to 300 people payroll. I guess projected numbers are amazing.

And the rest +vc money on ad's and paid installs. What the heck did PayPal buy?

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#127

Post by viraptor »

pbreit wrote: post #92
danShumway wrote: post #12

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…

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.

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.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#128

Post by gnicholas »

gamblor956 wrote: post #119
mikeryan wrote: post #112

Earlier quoted context omitted.

If Honey is inserting themselves between the blogger and the seller and then pocketing the commission, how is this not “stealing/hijacking” the commission?

Honey isn't inserting themselves between the blogger and the seller automatically. The user is doing that when they use the Honey add-on after visiting the blogger's website. This is no different then a user visiting a different website about the same product and clicking through the affiliate link on that new blogger's page before making the purchase.

What percent of the time does “using the honey add on” result in selecting a different vendor? That is, if you read a blog post and get linked to an Amazon page, does honey not try to capture a commission there? What if you open the add on to compare prices but still end up purchasing from Amazon?

Sorry if this is a dumb question, but I don’t use honey so don’t know the mechanics of how it works.

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#129

Post by gnicholas »

viraptor wrote: post #127
pbreit wrote: post #92

Earlier quoted context omitted.

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.

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.

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?

Re: PayPal to acquire shopping and rewards platform Honey for $4B

#130

Post by viraptor »

strbean wrote: post #61
graphememes wrote: post #14

I thought honey was a pure scam, it's not?

They are EBates, without the cash back. They just auto-plug coupons into coupon code forms and take the referral money.

Technically without the cashback. In practice you still connect honey gold which converts into vouchers, so it's really like 1-2% cashback.
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