Rakuten’s revenue for 2019 was estimated to be around $12.5B, and they don’t sell any products or services by themselves!
Even more, they actually pay you a cash back if you buy from other brands or big sites through the Rakuten.com website!
How does Rakuten make money?
This is the logical question that you should ask yourself now.
Because the answer to this question might allow you too to make money online without selling services or products by yourself following the same business model of Rakuten.com.
You are in the right place!
In five minutes from now, I’ll reveal to you how Rakuten works and makes money online, and how you personally can make money in a similar way even if you don’t have prior experience with all of the tools, training, and support that you need.
So, without further ado, let’s begin!
How Does Rakuten Make Money?
Rakuten makes money by referring people to online merchants and stores to buy their products at discounted prices, and those merchants or stores will pay Rakuten a commission on every customer that comes through Rakuten.com.
And this model is called referral, or affiliate marketing, which is a legitimate way of making money online, and my favorite business model.
And the commission that Rakuten gets from these merchants and brands depends on each brand, product, price, …etc., and it is usually a percentage of the total price, anywhere from 2%-15%.
But the question is, how does Rakuten convince people to buy from other brands or marketplaces like Nike, Adidas, Groupon, and others through Rakuten.com?
Why wouldn’t people just go directly to those websites and buy from there?
The answer lies in two things that help Rakuten make people buy from other brands and marketplaces through Rakuten.com, which are:
1 – Rakuten brings people deals and discounts that are difficult to find, which convinces people to go through Rakuten.com to buy these products instead of going through the original merchants’ sites and pay the full prices.
2 – Rakuten promises you to give you a cash back if you order through their website.
And this cash back might be a percentage of the product or order value, or it might be a fixed number of dollars.
And you might think now:
How Does Rakuten Profit if it Pays You a Cash Back?
Simply, they profit because what they pay you as a cashback is less than the commission they will get on your order.
For example, if you decide to buy a Nike shoes through Rakuten.com, they will bring you a deal with a discounted price, and they will offer you a cash back of 1.5% of the order value if you buy through them.
Let’s say that you want to buy a pair of Nike shoes that costs $125, and they offered you a discount coupon code of 20%.
This means that the net price will become $100.
Rakuten promised to give you back 1.5%, which will be $1.5.
So, now they are losing $1.5.
However, because Rakuten is a member of the Nike affiliate program, which allows them to get commissions on every customer that buys Nike products through Rakuten.com, it means that they will be paid a commission from Nike on your order.
And if we check the affiliate program of Nike, we will find that they pay their affiliates (like Rakuten) anywhere up to 11% commission on every order they bring to them.
And assuming that Rakuten got an 11% commission on the shoes you bought through them, this means that they have made $11.
And since they paid you $1.5 in cash back, this means that they have profited $11-$1.5= $9.5 on the order you have made.
And even if the commission on the shoes was only 5% ($5), they still made $5-$1.5= $3.5 in profit from your order, and they didn’t sell anything by themselves.
They are just the middleman.
And since Rakuten is a big website that gets ten’s of thousands of visitors per day to buy thousands upon thousands of products in all sorts of markets and industries, then expect them to make ten’s of thousands of commissions on the orders that come through the Rakuten.com website.
And that my friend is how Rakuten.com makes money online without selling any products or services by themselves.
And this is a legitimate way that many other websites generate income with, and it is how GoodRx works and makes money through offering discounts on treatments for examples.
And now to the important question:
Can You Personally Make Money with Rakuten’s Business Model?
Affiliate marketing is a legit way
that many people use to supplement their income online.
I personally make the most of my income with this model.
And the nice thing is that it is beginner-friendly, and it doesn’t require a lot of money to start with.
Actually, you can start an affiliate business with less than $500 investment.
Can you start a brick and mortar business with such a low investment?!
I don’t think so.
And you don’t have to start as big as Rakuten.com, and you don’t need any experience in websites or coding, thanks to the available tools or services that I will mention down below.
Affiliate marketing can be done at any scale.
Even better, you can choose in which industry you want to work.
Rakuten.com promotes products as an affiliate in almost every industry, such as: sports, luxury, apparel, fitness, …etc.
But you don’t have to do the same.
You can choose only one topic that is of interested to you, or even something that you like such as a hobby, a sport, an art, a profession, a skill, a passion, …etc., and build an affiliate business about it.
I personally have different affiliate businesses in different niches such as: basketball vertical jumping, Mediterranean diet, entertainment, engineering, and more.
And I can promote either physical products, such as shoes for example, or maybe I will promote digital products, like the training course on vertical jumping that I promote on my basketball site, and I get a commission on every sale that comes through my site.
And you as well can create an affiliate business around a topic or niche that you like, and potentially make income with it, if you follow the right steps without complicating things, and without a big investment.
The nice thing is that you can get started without a prior experience, but you need the basic training and the good tools and services that would help you do things efficiently.
Can You Make Money with Rakuten itself?
Of course, you can make money with Rakuten with the same way they themselves make money, affiliate marketing.
You will work as a sub-affiliate under the main affiliate, Rakuten.com.
Here, you join Rakuten’s affiliate program, and you start promoting the products they offer on their site, but you list them on a site that you own.
And if someone clicks on those offers on your site, and heads to Rakuten, and continue to purchase, Rakuten will first get a commission from the original merchant, and then you will get part of that commission.
But I personally recommend that you join the original affiliate program of the merchants themselves, in order to get the full commission instead of splitting it with Rakuten.
3 Steps to Start Your Mini-Rakuten.com Site
To start a website that works and makes money like Rakuten.com, you need to follow three simple steps:
1 – Choose a Market or Niche
If you want to succeed with your online business, then you need to focus on one niche or segment of the market.
You can go after many markets like Rakuten.com, but this will require you lots of time and will probably require you to have a team working for you.
You don’t have to do that at the beginning.
It is easier and faster to start with a focused business that promotes products in a specific niche that you are interested in, or something you know well.
As I mentioned earlier, you can choose your niche about anything you know about or like, such as:
- A hobby, such as: collecting stuff, rock climbing, magic tricks, mentalism, …etc.
- A sport, such as: basketball, golf, soccer, cycling, …etc.
- An art, such as: drawing, singing, playing piano, …etc.
- A passion or a cause, such as: yoga, veganism, dieting, …etc.
- A profession or skill, such as: graphic design, video editing, maintenance, DIY, …etc.
Almost anything you can imagine.
2 – Create a Simple Website Like Rakuten.com
No technical knowledge or experience is necessary.
Thanks to the available services and tools, you can start a website for affiliate marketing in 30 seconds, without any technical hassle.
More on that in the following section.
But you need the website so that you have a place that you own and where you can bring people to show them the offers you have for them, and then make money in the process.
3 – Start Helping People in Your Niche on Your Site
Rakuten helps people by finding good deals on products that they are looking for, and that’s how Rakuten makes money.
By helping people.
And you need to do the same if you want to make money with Rakuten’s business model.
You don’t just tell people to buy a certain product and expect them to go and buy it.
You need to offer them value and tell them why they need to buy it.
For example, if you make your site all about shoes, and you want to help people find the best deals on shoes from different brands, then your target audience might ask on Google stuff like:
- Metro shoes discount coupon.
- Clark shoes discount coupon.
- Keen shoes discount coupon.
- Sas shoes discount coupon.
And so on.
And they might ask other questions that are not related to discounts, but related to specific categories of shoes, such as:
- Best shoes for running on concrete.
- Best shoes for running for women.
- Best shoes for running for men.
- Best shoes for running on pavement.
And so on.
And your role comes here.
For each of these searches, you would write a simple article where you list the best 5-10 shoes that you found based on what people are searching for.
And in this article, you would link to the merchant or online store that sells each of these products, but through a unique link (affiliate link), which helps the merchant track your referrals and credit you for the sales that come from your website.
And when that happen, that merchant will give you a commission.
And with these three easy steps, you can make money like Rakuten following the same business model.
Want Help in Starting Your Rakuten-Like Business?
I will tell you where to find the help you need.
As I explained earlier, the business model of Rakuten is easy to follow, and it is a beginner-friendly one.
But there are lots of information about affiliate marketing everywhere, and lots of it is either outdated or incorrect.
If you want to start the right way since the beginning, and without wasting your time and money, so that you make money like Rakuten as soon as possible, you need the following things:
- A step-by-step affiliate business plan.
- A detailed training on implementing the plan.
- A good web hosting service with premium technical support so that you don’t care about the technical hassle.
- Research tools that would help you find opportunities for making money.
- An amazing support and community of experts and like-minded online entrepreneurs who are willing to help you whenever you need help.
And I have found one place that will provide you with all of these five elements together at an affordable cost, instead of paying lots of money on getting each of them individually.
This is the same place where I personally learned affiliate marketing in the first place, and that’s why I recommend it to you.
This place is an online platform that is called Wealthy Affiliate, the best place to learn affiliate marketing and start your business from scratch.
And the cost of joining this platform is really affordable, even low when compared to other programs or platforms that don’t provide half of what it provides to you.
This platform offers a 100% FREE Starter plan to try and get to see it from inside and join the community before paying anything.
This Starter plan will give you access to some of the tools and services, and will offer you access to the first level of the training (10 lessons) without paying anything.
So, if you are really interested in making money with the Rakuten.com business model, this is where to go.
If you are serious about learning more, check out this Wealthy Affiliate review in order to learn more about this platform and how it can help you, and you will find out how you can get started with the FREE Starter membership first.
I hope that my short article was helpful and explained well how Rakuten makes money online with the affiliate marketing model, and how you as well can use the same business model to make money online without selling products or services by yourself, with the training, resources and tools in the previous section above.
If you still have any question about anything I mentioned in this article, please, leave it in the comments’ section below, and I will do my best to help you out asap 🙂