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Comment by jartelt | Hacker News Reader

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 is a portion of their affiliate commission.

In some sense Honey can steal the affiliate commissions from blogs and other websites since you use Honey right before the sale.

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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 the seller, that is far more valuable, especially as a lot of Honey-generated sales may have been sales that would have otherwise gone to competitors.

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 just automating that process.

> 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?

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.

But is that superceding another site's affiliate link, or did you just go straight to the website yourself?

I'm going directly to the website.

How do they (Honey) know, though?

It's a browser extension.

Ok, I get how they do technically, but how the shops let honey insert they affiliate id and take a cut when the user has come directly from a newsletter?

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.

Do you work for them? It sounds like you work for them. Based on your description, the crux of it is they exactly do insert themselves between a blog / affiliate link and their incentivization towards a specific seller exactly does replace whatever commission the blog would have seen

Agreed. The parent is coming across as obtuse to the point where I wonder if it's intentional.

It sounds a lot like the two of you work for one of Honey's competitors. You both are coming across as obtuse to the point where I wonder if it's intentional.

Oh wait, you say you're just a guy on the internet and you don't work for anyone in the industry? Yeah, pal, same here. The difference is that I base my comments on having used Honey as a customer, not on some random comment based on a random comment by someone who hasn't actually used the product we're all talking about it.

It's fine if you guys want talk out of your rears but at least be honest about what you're doing.

I don't work for them, nor do I know any of their employees.

However, I have used their add-on and it does not work the way you described.

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.

> ”and direct those purchasers to the cheapest site in exchange for a commission.”

This is incorrect. Honey does not redirect you to different/cheaper retailers.

Honey is a browser plugin which applies coupon codes (scraped from the web) to reduce the cost of the purchase from the retailer at the checkout phase.

How are online retailers ok with this? Surely this violates referral kickback ToS or something? Doesn't seem fair to not pay the _real_ referrer that leads to a purchase.

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 can lose out on the referral commission in the end.

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)

But if the other affiliates are more valuable then merchants do care if they piss them off. After all they want those high value affiliates to continue doing what they are doing

90% of affiliates are very small players that don't have any bargaining power. In most modern platforms, all the referrers are tracked.

I'm pretty sure that big players do complain and they'll get a "first cookie" or at least partial attribution for the sales they make.

They have no individual bargaining power, but that doesn't mean they can be ignored. The more you ignore them the more go to greener pastures, the more you do for them the more resources they focus on your business.

In theory, yes. But that's not my personal experience (I'm mostly active in Europe).

I think we're in agreement. The numbers through Honey probably look good, and the other affiliates probably don't have a good handle on how frequently they're getting scooped by other affiliates.

Rewards and coupon websites are notorious for leaching off the affiliate process without driving much incremental revenue. In the heyday of ABestWeb.com they coined the phrase ParasiteWare for places that stuff cookies like this.

The overall affiliate channel has become increasingly challenging to manage profitably from a merchant perspective. But it’s very easy for a “manager” to see all of the sales affiliates “drive” and assume that it’s making them money.

If you let affiliate sell for you, you had better invest in a professional affiliate manager that you can trust. If you source it to an intern you’ll lose a ton of money to leeches and fraud.

What about services like revlifter[1] where you put their script on your basket page and they give customers offers based on their basket contents?

[1] https://revlifter.com

This seems very similar to yieldify.com

I don’t know anything about revlifter. But I’ve been in this space long enough that I’m skeptical of most claims.

I usually try to build flows now that don’t ask for coupon codes at checkout (because that leads to deal searching right at the last moment). I prefer dedicated URLs with embedded offers as much as possible.

If you need to go the coupon code route, I recommend how Namecheap does it: they registered a unique domain (namecheapcoupons.com) that publicly list all coupon codes. They rank #1 in organic search results.

But, as a general rule, I encourage you to avoid working with deal sites and coupon affiliates. This is a general rule, but they tend to drive very little incremental revenue. You should also disallow any PPC campaigns using your branded terms.

> that stuff cookies like this.

It should be noted that cookie stuffing is a term for a specific process where a site will inject cookies for thousands of sites with their own referral code on pageload of a landing site they control. It is highly illegal and people have served jail time for it, as it is considered fraud.

What coupon sites do is they tend to hide codes behind a button that onclick will load the retailer's site with their affiliate code, then show the code.

Sure, you can note that, and that's helpful, but other than in the strict legal sense, many coupon code sites do engage in other forms of coupon stuffing. For example, many display fake coupons which don't exist or which they know are expired, and which you must click to reveal. Upon clicking, the target site opens in a new window, and a cookie is dropped. The user was already buying the product anyway, and perhaps another affiliate was set to get the referral commission, but now this accidental popup has stolen it for the coupon site, and there's no coupon to be found. No value delivered for merchant or customer, but the coupon site makes money.

There's a lot of forms of cookie stuffing that are legal, or at least grey, and still seem to me like cookie stuffing, even though they aren't standard, clear-cut, illegal cookie stuffing fraud.

That's not cookie stuffing, that's just being deceptive. Cookie stuffing doesnt just mean sending a user to an affiliate link, it means specifically loading unrelated sites, usually in the background (or used with js/flash). I'm noting it because you're using the wrong term.

https://en.wikipedia.org/wiki/Cookie_stuffing

I disagree that there is a monopoly on the term. But even if we accept that, my example meets the requirements of the page you linked. Read it more carefully.

This is simply not true. I don't think anyone would pay $4 billion for a referral stealing chrome extension anyway

They're paying for the large existing userbase, regardless of how that large userbase was acquired.

Agreed. Most people just don’t understand how it could be so simple or how honey makes so much.

Sure! But just 17 million user by itself isn't worth $4 billion. It's the value brought in per user. There's no figuring out what you want and what are your interests like with social media platforms, it's straight forward giving away info about what you want to buy, what will make you buy it etc.

Just look at Honey Droplist https://www.joinhoney.com/features/droplist. Let's say that I wanted to buy a product but I think I'd rather buy it at 5% off. Or let's say that I just put it on droplist for no reason and am not that interested to buy it. Honey could literally provide this information to retailers and suggest price drops and email honey users to create demand. Now, when you see a 10% price drop notifications, you being prone to scarcity are so much more likely to buy. And that's why this data is so valuable.

Now on top of this, you got rewards programs, payment splitting programs (https://www.joinhoney.com/honeypay/overview) (which provide yet another advantage, you got a discount but still can't afford to pay, how about you only have to a quarter of the price right now?), a mobile app with 100+ stores integrated in a single app, it adds up!

Those are all good points. I believe paypal wants Honey for one thing, to insert themselves in the middle of the checkout process and offer incentives to complete checkout using their payment service.

Are you sure it's not worth that much? That's only $235 per user. Given how affiliate revenue can easily approach 10%, and their average user probably spends thousands of dollars online per year, it seems easily within the bounds of reason to me.

"...PART of what they do..."

It's interesting to compare this discussion with how adblockers are treated. Either we're in favour of the user having control of the operation of their browser, including delegating that to extensions, or we're not.

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