Web-based coupon companies can earn money through affiliate programs and relationships with other deal distributors. In an affiliate relationship, a large online retailer or coupon company pays another website to attract traffic to their own offers. Smaller coupon companies can publish offers from larger coupon distributors, sending their own traffic to the larger company and receiving a commission on the resulting revenues. The benefits of offering coupons include introducing new customers to your store or website.
Coupons can also introduce new product lines and help sell excess or unwanted inventory to make room for newer products. Coupons can be used to strategically encourage customers to buy a new, more cost-effective product to help increase their profit margin. In addition, coupons can retain current customers by using the discount as a reward to ensure that they continue shopping in your store. However, like most “sexy” business models, making a profit on a coupon site is much more difficult than most people assume.
Coupon sites make 99% of their money with advertising revenue and affiliate commissions. A coupon site needs A LOT of traffic to be profitable. The easiest way to make money with coupons is to combine them with other coupons or through refunds. You can combine manufacturer coupons, store coupons, and cashback offers in one item, but you can't have two identical coupons per item.
In general, coupon websites make money by receiving more than 20% for each offer purchased. In some cases, websites keep half of every offer purchased. While it's easy to see how coupon and deal websites can help consumers save money, it's not as clear how they can make you money with one. You can even offer coupons using QR codes, allowing consumers to simply scan and download the discount and provide your company with key information about the potential customer.
There are several websites that collect coupon codes from many retailers, such as RetailsMeNot, Slickdeals, and DealsPlus. Businesses can share coupons with shoppers on social media or through email marketing software, as well as on traditional marketing channels, such as billboards and radio commercials. Paper coupons are usually delivered by mail or through coupon catalogs, and many retailers issue coupons with every purchase to encourage repeat business. Online coupon distributors can take advantage of ad placement services to sell advertising space on their websites.
For example, Square, one of the most popular web platforms for online purchases, has a simple interface for managing coupon codes. Vince Vigorito, director of sales at direct-mail coupon firm Valpak, said that small merchants should analyze each offer because they have a lower margin of error than that of larger organizations. In addition to selling offers on an individual basis, coupon companies can sell coupons in bulk directly to consumers. Coupon sites have become a profitable business on the Internet because they have found a need and satisfied it.
An emerging extension of coupon sites are sites that also offer browser extensions as another way to make money. These sites work with retailers to offer coupons, allowing the company to find new customers and helping customers find better deals. It's a great concept, especially since people want to save but don't have time to look for coupons.