Couponer Wanted
In And Out Of A Coupon Site
When you shop online, you probably have already come across many different sites with a lot of online coupon codes. By using those codes, you can get a product or service at a discount. Have you ever wondered how come those sites can gather so many coupon codes?
Coupon sites are usually based on affiliate marketing model. Although we will not heavily discuss affiliate marketing here, a quick summary of affiliate marketing is:
A web publisher (a.k.a an affiliate), in this case a coupon site, will promote a product or service of a
merchant on his/her website, the merchant will pay a web publisher on each action this web publisher generates for this merchant. Most of time, a web publisher will get paid by commission for each sale of a merchant’s product or service.
You will notice that a coupon site usually lists tons of merchants and people who run a coupon site will earn commission for each sale on any of the merchants on a coupon sites. That is the primary revenue model behind a coupon site. Good coupon sites like (http://www.coupon-lover.com) are working hard to acquire quality traffic and drive the right traffic to right merchants with the goal to help merchants achieve more conversion.
Many merchants usually will provide coupon sites with various discount codes, special deals and promotion in order to help coupon sites promote their products and services at a discount. Since most site visitors coming to coupon sites are bargain hunter, it is simply natural that when a merchant provides a coupon site with some sort of deals, coupon codes, or promotions, the conversion (sales) will rise. If a site visitor comes to a merchant page within a coupon site and cannot find a coupon code, he/she will simply leave and keep on bargain hunting. Now you get a simple idea how a coupon site gets coupon codes from merchants.
Most coupon sites are participating affiliate marketing networks. The famous ones include Commission Junction, LinkShare, PepperjamNetwork Those affiliate marketing networks usually have tons of merchants (almost every merchant or retailer you can image) and numerous web publishers who want promote those merchants. Merchants usually distribute coupon codes through affiliate network to massive publishers. That is why many coupon sites can have so many coupon codes from different merchants.
Some coupon sites are so popular and they are capable of driving a lot of sales to a merchant. Because of this, those large merchants typically demand special or exclusive discounts from merchants. That is why some big coupon sites have coupon codes which are not available on smaller coupon sites. In order to get on the premium spot of popular coupon sites, many merchants usually offer great discount, accompanied by increased commission rate, to those coupon sites.
I would like to digress a bit and tell you a bit more about what is affiliate marketing networks.
The company running affiliate marketing networks serves as a middle person to provide services including tracking, affiliate quality assurance, payment, communication between publishers and merchants, account management to facilitate cooperation between publishers and merchants. Affiliate network firm will usually get paid for providing these services. This cut is usually a percentage of the amount of commission paid to publishers. Publishers will not suffer any loss of their income. The service fee to affiliate network company adds up as an extra cost to a merchant. For instance, if the commission rate for one merchant promised by affiliate network is 15%. That merchant will actually have to pay 18% to affiliate network company and affiliate network company will keep 3% before distributing the remaining 15% to you.
There are a lot of benefits of having this kind of affiliate marketing network. A publisher will receive one single commission payment from affiliate network company for all the sales on all different merchants being promoted, while a merchant only needs to make a single payment to affiliate network company who will pay each publisher separately generating sales for this merchant. The back-end tracking of affiliate network company make this become possible. Without this, you probably can image that a publisher might have to receive numerous payments separately from different merchants, while a merchant has to make numerous payments for each publisher. Plus affiliate network could also serve as a escrow service for both merchants and publishers. A publisher will not have to worry about not able to get paid for each valid sale generated, a merchant will not have to worry for paying for invalid or fraudulent sales. Affiliate network company has its back end which will take care of both publishers and merchants. This is separate issue and I would write another article separately on this.
Since merchants are the ones who pay money, unfortunately most affiliate network companies are more on the side of merchants and less on the side of publishers.
If you choose not to work with an affiliate marketing network, many merchants now also offer their own stand-alone affiliate marketing program, which allows a publisher to bypass the affiliate marketing network and work with merchants directly. Merchants sometimes give different promotion, coupon codes on their stand-alone program and their program hosted with affiliate marketing network separately.
The last touch I want to mention is cash back site. The logic is the same. Cash back sites also make money by earning commissions. But the difference is that cash back sites will pass a portion of their earned commission as cash back to users who shop through their websites. In this case, both cash back sites and shoppers will get money. As a result, shoppers will have more motivation to shop through cash back sites, cash back sites will make money. The snowball will just keep on running.
I hope this article will give you a brief idea how a coupon site is running.
©2010 Coupon-Lover.com
About the Author
Kevin is an editor with Coupon-Lover.com a site which provides coupon and discount code.