Groupon’s net revenue for 2019 exceeded $2.2B, and all without selling any products or providing any services by the company itself!
What might be more surprising to you, is that the coupon’s site actually pays you a cash back reward on some products and services if you buy them through the Groupon.com website!
How does Groupon make money?
This is an important question to ask.
Because understanding how Groupon.com profits despite not selling anything by itself, opens a wide opportunity for you to make money online with the same Groupon business model without having a product of your own.
And you have come to the right place!
Because in five minutes from now, you will understand very well how Groupon.com makes revenue without selling anything.
And more important, you will see how you personally can make money with this model even if you don’t have prior experience, thanks to the resources and tools I will reveal to you that helped me personally make income with this method.
So, without further ado, let’s begin!
How Does Groupon Make Money?
Groupon makes money by getting good deals on different products and service, and promoting them to people who need them, in return of a commission that they get from the merchants on every paying customer they bring to them from Groupon.com.
And the commission that Groupon might receive from these merchants depends on many factors, such as the merchant itself, the product, the season, the order value, …etc.
But it is usually a percentage of the order value that ranges anywhere from 2%-15% or more when it comes to physical products, and might go all the way up to 50% or more on digital products like software tools and downloadable products.
The way how this happens, is that you someone might go to Groupon.com to look for a coupon code for Target.com, and they find different coupons on Groupon.com.
And if they click the green “Get Deal!” button, they get redirected to the Target.com website through a unique link (affiliate link), which helps Target recognize that this visitor/customer has come from Groupon.com.
And if that person buys anything from Target, Groupon will get a commission on that purchase, which is usually a percentage of the order value that might go all the way up to 8% of the order value.
This is done through the Target.com affiliate program that gives affiliates like Groupon the tools to create unique links and banners, and place them on the Groupon.com website, so that everything is tracked properly.
And the same applies when you get a coupon code from Groupon.com to any other merchant or brand such as Amazon, Nike, Walmart, …etc.
But here’s the question:
How does Groupon.com make sure that people coming to the website click on their affiliate links so that they get paid commissions from the merchants?
Can’t people just go directly to those merchants’ sites and buy without clicking Groupon’s affiliate links?
The answer to this very important question comes in two points:
1 – Groupon.com gets its visitors discount deals that people wouldn’t find if they go directly to those merchants, which makes people click on Groupon’s links in order to get the deals.
2 – Groupon offers its users a cash back reward on some of the services and products if you buy them after clicking on their affiliate links.
And this cash back reward is usually a percentage of the order value.
And since Groupon.com gets thousands upon thousands of visitors per day.
And lots of these visitors click on the affiliate links to get the deals and rewards they offer, which means that Groupon gets commissions from different merchants and brands on potentially thousands of orders from different customers.
And that’s how Groupon.com makes money online and how their business model works.
And you might ask now:
How Does Groupon.com Make Profit if it Pays You a Cashback?
This happens by the fact that when they pay you a cash back on a certain order, they actually get a commission from the merchant on that order, which is higher than the cashback reward they paid you.
For example, if Groupon gives you a cash back reward of 10% on a certain product you paid through them, they might get a 15% affiliate commission from the merchant on the same product.
This means that Groupon.com has netted 5% in profit on that order alone.
And if the order value was $100, Groupon will get around $5 from the order alone as a profit.
Multiply that by thousands of orders per day, and many would get them even higher commissions, and you can see the potential income that Groupon generates.
And all of that without selling any service or product by Groupon itself.
Groupon.com is just the middleman, aka affiliate.
This is what is nice about this model, it doesn’t require the affiliate to create a product, ship anything, or provide customer support.
This is how RetailMeNot makes money online as well, in addition to many other coupon sites.
And now to the important question:
Can You Make Money with The Groupon Business Model?
Many people, including myself, make money with affiliate marketing.
The great thing is that this is a beginner-friendly method, and it comes with the lowest level of risk as it doesn’t require a big investment to get started with it.
Actually, you can create an affiliate business with Groupon’s business model for less than $500.
Can you start an offline business with such a low investment?
I don’t think so.
And you don’t have to start as big as Groupon.com if you want to make money with their model.
Affiliate business come in every size and scale.
Even better, you can choose what products and offers you want to promote as an affiliate.
You don’t have to go and promote everything from every merchant like Groupon does.
You can focus on one market or niche that you are interested in, or something that you like, such as: a certain sport or hobby, a passion like yoga or veganism, a skill that you have like playing guitar, an art that you practice like singing or drawing, …etc.
I have built many different affiliate businesses in different niches such as: finance, software tools, basketball, dieting, and more.
And I promote different sorts of products that could be physical products like basketball shoes, or digital products, like a software that generates a customized meal plan based on a quiz that someone finishes, like I do on one of my sites.
I get a commission anytime someone goes from my website to the website that sells these products and tools and buys them.
And you too can start an affiliate marketing business and leverage Groupon’s business model to make money online without selling anything by yourself.
And the best thing, you can get started without prior experience and at a low investment, like you will see in the following section.
Can You Make Money with Groupon itself?
You can make money with Groupon.com with the same way they themselves make money, affiliate marketing.
This way, you become an affiliate to Groupon.com and promote the offers they are listing on their site, which means that you work as a sub-affiliate under the big affiliate, Groupon.
And if you bring them someone who would click on an affiliate link that is listed on Groupon.com, and ends up buying something from the original merchant like Target, Groupon will give you part of the commission they will get from Target.
However, this means that you get less than the original commission that you would get if you just became an affiliate for the original merchant itself.
Start Your Own Mini-Groupon.com Site TODAY in 3 Simple Steps
If you want to start a site that makes you money like Groupon.com does to its owners, you need to follow these three simple steps:
1 – Select a Market or Niche for Your Business
Success in any business, online or offline, comes from understanding your target audience.
And this is why you need to focus on a specific niche or group of people so that you understand them well, and so that you finally make money with Groupon’s business model.
And with affiliate marketing, you can go with almost any niche or market that you are interested in or the one that you like or know well.
This could be:
- A hobby that you have, such as: climbing, playing chess, magic tricks, …etc.
- An art, such as: drawing, painting, writing songs, playing saxophone, …etc.
- A sport that you like or practice, such as: basketball, baseball, soccer, cycling, …etc.
- A passion or a cause, such as: yoga, cooking, veganism, dieting, …etc.
- A profession or skill that you have, such as: graphic design, technical drawing, maintenance, DIY woodworking, welding, …etc.
Almost anything you can think of.
For example, let’s say that you have chosen your niche to be helping swimming lovers find the best gear for improving their swimming, which is one of the many categories available on Groupon.
2 – Create a Simple Site Like Groupon.com
You don’t need an experience or to learn anything technical in order to create and run an affiliate site.
Thanks to the available technology and tools, you can now build an affiliate site in 30 seconds, without any technical knowledge.
I will tell you where to find these tools in the following section.
Most important is that you need a website that you own if you want to succeed on the long term, like Groupon.com did.
3 – Start Helping Your Audience
Groupon does not make money by telling people to go and buy stuff.
The actually make money as a result of helping people.
Groupon.com brings people deals and offers that they can’t easily find by themselves.
And that’s why people click on Groupon’s affiliate links and Groupon ends up getting commissions.
And you need to help your audience if you want to make money as well.
And this happens by creating helpful content on your site that gives people help, and offers them products that they really need at a reasonable cost.
Sticking with the same example above, your audience might ask on Google stuff like:
- Best swimming pool under 500.
- Best swimming watches under 100.
- Best swimming goggles under 20.
- What is the best thing to put under a swimming pool.
And so on.
And here comes your part of the job.
For each of these search queries, you need to research and find the right answer, and right a helpful article that answers people’s question and tells them what to do or what to buy.
These could be how-to answers, or could be list-based posts where you list the best 5-10 items they are looking for, like this site that lists the best swimming goggles for under $20 price.
And in this article, you would link to the brand or online store where they can find the product you recommend to them, but you would link through an affiliate link that you get from that merchant or store, like Amazon in this example.
This way, if someone clicks on your link and goes to Amazon and buys the product, you get a commission from Amazon that depends in value on the product price and type.
And with these three simple steps, you can make money like Groupon.com following the same business model.
Need Help in Creating Your Groupon-Like Business?
Affiliate marketing is a beginner-friendly business model, but there’s a lot of misinformation about it on the web, and lots of outdated information and tutorials.
And if you don’t want to waste your time, and money, figuring things out on your own, then you better join a legitimate program that teaches you everything you need and gives you a step-by-step proven plan to follow.
And here comes my recommended program to you, which is a platform and community that is called Wealthy Affiliate, the same place where I personally learned and I still learn affiliate marketing today.
And the reason I recommend this platform in particular is that they give you everything you need in one place, such as:
- A step-by-step proven affiliate business plan.
- A detailed video and written training course to help you implement that plan.
- A great website builder and web hosting service with premium support so that you don’t worry about the technical stuff and issues.
- Many affiliate research tools that would help you find good opportunities for making money like Groupon.
- A great and supportive community of expert affiliates and like-minded entrepreneurs who are willing to help you whenever you need.
All of that for a fixed and affordable monthly fee that includes everything without upsells or surprises, unlike other programs that cost thousands of dollars for less than half of what this platform gives you.
Not sure yet?
This recommended platform offers you a 100% FREE Starter membership plan so that you try it and get to know the amazing community.
And this plan will give you access to part of the tools and services, in addition to access to the first level of the training (10 lessons) without paying anything.
If you are really interested in making money with the business model of Groupon.com, this is the right place to go.
You can check out this review of Wealthy Affiliate platform in order to learn more about it and see how you can get started with the FREE Starter membership first.
There it is.
I hope that this short article has helped you know how Groupon makes money online with the business model of affiliate marketing model, and how you personally can make money with the same model, if you get the tools and resources mentioned in the previous section and put in the work to build your business.
If you still have more questions about anything I explained or mentioned in this article, please, let me know in the comments’ section below, and I will do my best to get back to you asap 🙂