What is the best shopping experience? Of Course, it could be getting your favourite product at discounted prices. But wait!!! How do you get to know about discounts? If you’re a shopaholic then you might surely know about deal websites. As there are hundreds of deal websites available online, Groupon is the favourite destination for most of the shoppers. Many shoppers are stealing the deals and availing upto 70% discount on their online purchases.

Let’s dive into Groupon!!!

What is Groupon?

Groupon is the world’s leading deals and coupons website. It was founded in 2008 by Andrew Manson, Eric Lefkofsky and Brad Keywell. The company is connecting millions of customers with e-commerce and local business. These online shopping platforms display vouchers, coupons and discounts on Groupon. Groupon runs profits by implementing traditional business models i.e “being a middleman”.

Simply put, Groupon is the best hyperlocal online destination that is connecting customers to businesses by providing deals and discounts. Whether you’re looking for travel coupons or local deals, look no further than Groupon. The platform is offering the latest deals and coupons from various categories such as fashion, travel, hotel, health, pet supplies and more.

Unbelievable stats of Groupon

• 1 million merchants worked till the date
• Founded in 2008
• More than 200 million people downloaded Groupon app on their devices
• 38 million active customers
• Over 1.5 billion groupons sold
• Over $35 billion saved by customers in North America

Groupon business model

Groupon follows a straightforward business model. It is the marketplace that is similar to popular e-commerce platforms such as Amazon, eBay and Alibaba. On the other hand, it operates pretty differently from other e-commerce marketplaces.

Sounds interesting right? Yes!!!

As already discussed, Groupon is the leading e-commerce marketplace that is connecting millions of customers with local commerce by offering activities, travel, hotel and other services at discounted prices. The company has replaced the traditional method that local and online business has used newspaper, television, yellow pages and radio to promote their products, services and offers.

The value proposition implemented by Groupon is pretty simple. Groupon connects customers and merchants under its platform. Also, Groupon follows various strategies to get customers attracted to the merchant by presenting great deals and discounts.

How does Groupon work?

Groupon’s operating model is straightforward. As mentioned before, it’s the one-stop destination for customers and sellers. The platform is connecting them in a different way and earning good revenue. Sellers are showcasing their offers and coupons. And Customers are availing the latest coupons from online and local stores. Groupon earns revenue from every refereed customer to e-commerce or local business.

For customers

Groupon is one of the popular deals marketplaces that allow customers to explore the latest coupons and offers on millions of online and offer stores. The platform helps customers to save huge bucks on purchased products or services. Groupon is differentiating itself by enhancing the user’s experience by sending personalized emails and displaying target ads. This will let customers save money on their online or offline purchases.

Customers will check the latest offers and coupons on Groupon homepages and merchant pages. According to customer interest, they will pick the offer and proceed to purchase. Whenever a customer finds the perfect deal or coupon code, they click on the offer and copy the respective voucher code. At the same time, they will redirect to the merchant website and redeem the coupon code to grab a discount on their purchases.

For sellers

It’s no surprise Groupon provides amazing value to businesses. As the platform is helping millions of sellers around the globe. The key benefit for sellers is they get access to new and existing customers. If you’re new to the business, connecting with Groupon is worth it for you. The platform brings you new traffic and increases conversion. Whenever a customer redirects to a merchant website and purchases, Groupon will charge a commission on every referred sale.

Sellers are getting amazing advantages from partnering with deals marketplace – Groupon. According to analysis, more than 78% users referred by Groupon are visiting the merchants and placing the order again. Currently, there are over 1 million sellers promoting their latest offers, deals and voucher codes.

Groupon revenue model

Groupon is the leading e-commerce marketplace connecting millions of customers with merchants. The platform is a one-stop destination for the latest coupons and offers. The revenue model is simple and easy. Groupon is made up to showcase deals and offers to its customers and earn profits on every referral. The category-based commission is implemented at Groupon. The commission may vary from one merchant to another. For example, Groupon earns more commission on appliances compared to fashion accessories.

Let’s dive into the topic

Groupon differentiate between 2 types of revenue

• Service revenue
• Product revenue

Service revenue

The revenue generated by service is primarily for Groupon. The marketplace earns a great commission on every service.

Groupon works in a straightforward way, it sells services and other goods on behalf of merchants. Simply put, the website will make the savings double for third party merchants by promoting their products and services through offer or voucher code.

Consider, the online or retail purchase is done using digital voucher codes accessed via Groupon. These are likely called card-linked offers. The website earns money through advertising the merchants on their website, blog, social media and newsletter.

Product revenue (goods)

This is something interesting. Apart from advertising other merchants, Groupon is acting as an intermediary between merchant and customer. 

Also, the platform is making money by selling its own products. Whenever a customer purchases the product, their team will get from its warehouse. The fulfilment procedure is managed by Groupon and shipping will be handled by other parties.

There are various types of operating models are implemented by Groupon such as:

• Platform business model
• Marketing or advertising model – it includes various payment methods such as pay-per-display, cost-per-click, cost-per-sale and more.
• E-commerce retail model

For more information, you can check on Groupon website.

How does Groupon make money?

Are you eager to know how Groupon is running a profitable business? How does it make money? Let’s discuss now,

Groupon is earning a good amount of profits by promoting and advertising merchants on its site. Simply put, Groupon website is the middlemen between customers and sellers. They charge a commission on displaying merchants’ offers and referred sales.

Let’s consider if you’re running an “ABC” campaign on Groupon. You would like to promote an offer of 50% discount on the service of $100. Here, you need to sign a contract of 50-50% revenue share. This means you need to pay $25 for Groupon for promoting your offer on its site. As a result, you will earn $25 in every sale.

The commission will depend on marketing tools that are utilized by the seller or merchant. The popular marketing tools are deal of the day, home page, newsletter, advertisement and more.

Source of expenses for Groupon

Cost of acquisition

Acquiring merchants can be a daunting task for the deal website. In fact, this could be probably an expensive task for Groupon. The deal marketplace needs to sign a contract with millions of merchants. The more merchants imply the more revenue for Groupon.

Marketing costs

Acquiring customers is as important as acquiring merchants. With customers any website is useless, it could be a deal website or e-commerce website. Everyone agrees that customers play a vital role in Groupon revenue. Acquiring customers can be costly for Groupon. It includes email marketing tools, advertisements, referral bonuses and more.

General & administrative cost

General and administrative expenditures are pretty higher. As the costs include overall operations of the organization. It includes employee compensation, accommodation, accounting expenses, legal costs and more.

Groupon is running a successful business and generating a good amount of revenue from initial stages. According to the analysis, Groupon has earned more than $2.8 billion in the year 2017. The platform is generating great income by advertising merchant services and products. The revenue is earned on every refereed sale. Currently, Groupon marketplace has generated over $395.6 million in 2020.

Conclusion

Groupon is the best marketplace of latest coupons, vouchers and deals. The platform displays deals from millions of online and local businesses. Groupon showcases ongoing deals and latest offers from various categories that are ranging from flight ticket booking to hotel booking. Millions of customers are using these deals provided on Groupon and save huge bucks. Groupon’s business model is simple and straightforward. The company sells the latest offers, coupons and voucher codes to its customers and earn commission on every referred sale. There will be no fixed cost to sell products or services on Groupon. However, the platform takes an amount of commission from every sale made by the customer. This is called “marketing fees”. According to a recent analysis of 2020, Groupon has earned over $395.6 million by advertising third-party business products or services. Hope you’ve understood how does Groupon make money.

 

When you’re not familiar with the route, reaching a place becomes hard. Thanks to Google maps people can now go anywhere they want without worrying about getting lost. From unknown streets to cities with navigations apps, you can travel without worrying about anything. These apps have become travel essentials. They come with amazing features that make your travel even more comfortable and convenient. 

If you talk about navigation tools, most people are familiar with Google maps. But did you know that there is another navigation tool called Waze? This software app was developed by Google. Aren’t you curious to know more about Waze? Yes, then let’s continue and till the end of this article, you will know more about Waze.

First thing first, let know what is Waze exactly 

Waze

It was released back in 2006 and Waze works on both tablets and smartphones that support GPS. The best thing about this app is that it usually downloads all the location-based info on mobile data. Although Google maps provide users with the most accurate navigation guidance. However, Waze improvised upon navigation guidance by offering users with turn-by-turn navigation along with the travel details and other route information submitted by other users. In case there is an accident in the direction you’re headed it will inform you beforehand so that you can change your direction.

This app is community-driven navigation and traffic that runs on both tablets and smartphones that have GPS. Users can download it on both Android and iOS. As already mentioned this app was founded 14 Years ago and was initially called FreeMap Israel. But it wasn’t until 2008 that it was commercialized and called Waze. One of the amazing things about this app is that it has expanded to around 185 countries and it is currently available in 185 countries.

Waze was acquired by Google in 2013 for a whopping sum of $1.3 billion. The intention behind this acquisition was to develop Google maps with the help of Waze. But to this day Waze still remains the standalone app. 

Since there are many navigation apps in the market, what makes Waze different from them? Valid question. The thing that makes this software different from others is its crowdsourcing. You can say that it is the major aspect that brings a slight change in the app.

Business Model  

If you want to know about the Waze business model then you must first understand how it works and the key partners involved. Are you ready? Then what are you waiting for, let’s dive right into the topic then?

How does it work?

In the introduction, you must have read that one of the main reasons why this app is different from other navigation apps in the market is its crowdsourcing. If you don’t get what it means, no issues, you will understand it deeply here. This platform allows the users to update or share information relating to the traffic or the area they travel through this app.

Simply put if there is an accident on a particular area while they’re on their way to reach a place they can share or update in the app. This way people who are going in that area can know about the accident earlier and can avoid taking that route to reach their destination faster. Cool, right?

Waze is always on point when it comes to taking you to the route. Do you know why? Because all the details about the traffic are shared with the users real-time. So they share in the app in case there are any disturbances such as blockades, accidents, constructions, police activity or any social activity. It is better to have information on the routes you’re travelling to avoid getting stuck in the traffic or reaching out late. 

So when users provide such information this platform takes all this data and their algorithm calculates and provides you with the best routes to reach your destination faster. Also even when you’re on the road the app calculates the best route by making changes to the route if necessary based on the real-time info provided by the audience.

It is not an exaggeration to say that the users who use this app are clearly adding more value to this app by sharing all the data and information. And Waze is improving itself by consuming all this information and providing the users with the best route to reach location faster.

This brings us to the key partners. If you want to understand more about Waze and its business model you must know about the key partner that contributes to its success.

Key partners of Waze

Users 

As mentioned about the users share or update information relating to traffic and routes real-time. These contributions are proven to be beneficial for the Waze. With the help of this contribution, the app is able to provide the users with real-time updates and the best route to reach on time. 

Drivers

The people that use this app more than anyone else are the drivers. These are the people that bring in money to the Waze. They may not contribute to the update or share information about the route. But these people use this app regularly to find the best route to reach a location. They get benefited from the data provided by the other users within the app. These people solely use this app for navigation.

Advertisers 

For any app or software to survive for a long time, they definitely need the support of the advertisers. Simply put, advertisers are key partners for any app because they bring in money. It is the same for the Waze because there are many companies that sign-up to advertise on this platform. So the companies pay to advertise ads, banner placements, etc. The algorithm of Waze allows these ads to appear in the app based on the user’s real-time location. 

Since then you have understood the key partners and core idea of Waze. Now it is time to know about how this app makes money. 

How does Waze make money?

Now that you have understood about the idea behind the Waze and how it actually works. It is time for you to understand the revenue model of Waze.

Advertisements

Like all other apps, advertisements are the major source for Waze to make money. As you already know advertisers are the key partners for the Waze app. They use in-app location-based advertising. SO they show the users the relevant ads or banners on the app based on their location. Apart from location-based advertising they also offer services under the PPC (pricing per click) pricing model.

These ads displayed on the app interface. Not only that the app will display ads real-time based on the user’s location. It provides information about stores near to them through these ads. They are offering 3 formats for the advertisers to choose from. 

The 3 formats are Branded Pins, Zero Speed Takeover and Search ads.

Branded Pins

These are the pins that appear on the map. This is a better way to advertise stores, restaurants, etc. Whenever the user is driving through these signs will notify them of the nearby stores, etc. An excellent way to promote your business, right? When people go on long road trips these signs will actually help them to get to the nearest restaurants, hotels, etc. You can pin your location on the map and attract more on the route customers.

Zero-Speed Takeover

These are the ads or banners that pop up on the app. In a way, you can call them digital billboards. Since many drivers are using this platform. Don’t you think it is an excellent platform to promote the business? Many of the brands are clearly using this opportunity to connect with more people and increase their network. But these ads will not be displayed when the user is driving. They will only pop up if the driver stops driving for at least three seconds.

Search ads

This is the last format that is offered by Waze. These are the ads that are usually displayed above the search bar. So whenever a user opens the search bar the first thing they will see is these ads. 

Since you have known about the different formats it offers. It is time to know about the plans that Waze is offering. There are two plans and companies can sign up to their plans based on their requirements. If you want to advertise in 1-10 locations then the starter pack is perfect for you.

Improve your in-store traffic with these pins on the map. But if you want to put ads in more than 10 locations then Plus plan is perfect for you. Plus plan brings in excellent features. You can advertise upto 50 locations. Also, you can get live support. So use this plan to boost the visibility of your business. 

Starter- $2/day

Plus- $100/day

Data Deals 

This platform collects a lot of information from its users to improve their service. It also provides its users with ads and important information real-time. Since it has all the data and updates about the routes, it can also make money by selling it to other companies. If a company wants to create a navigation app they have to start from scratch and do the research.

However, Waze can make money by selling the already collected data to these companies. It is a win-win situation for both Waze and the other company. Data deals can also bring in a good deal of income. So it can be considered as an amazing source of income. 

Carpooling 

This service was introduced by Waze back in 2018. Like all other carpools, it doesn’t connect the customers with the parttime or fulltime drivers. It mostly encourages the regular drives to carpool with other riders. Cool, right? The Waze users can access this feature from their Waze app. However, if you’re a driver then you must download the Waze carpool app. This app is available in both Android and iOS versions.

Currently, this service is available in Brazil, US, Mexico and Israel. Carpooling is also an excellent way for this platform to make money. But one must remember that Waze only allows only two carpools per day for each rider and drive. Yup, you heard it right. For every mile, the pay is charged a maximum of 54 cents. Wondering how is the pay determined? There are many other factors that have a role in determining the price of each ride. 

Wanna find out the factors involved in price determination are

Basic Price

The basic price of this carpool is calculated by Waze by taking into consideration the number of people riding and the route taken. So the basic price doesn’t include any other charges. It is just plainly calculated based on the number of people travelling and the route taken.

Riders

The number of riders travelling plays a role in the calculation of the basic price too. A driver can accept as many riders as they please. So naturally, the prices will vary based on the riders leaving and joining the carpool. But no matter how many people come and leave the prices will not exceed from the amount that is shown at the time of confirmation of the price. 

Coupons/ Promotions

Also, Waze usually gives coupons or promotions. The users can grab them and use them on rides to reduce the overall price of the ride. So this is the best way to reduce the price of the ride. So this also becomes an important factor to determine the price. 

Service fees

The good thing about Waze is that they have waived these fees. So there will be no inclusion of service fees in the final price. 

Wrapping up

As you have made it to the end then you must have understood about the Waze business model. This is one of the amazing navigation apps that will help you in finding the best route to reach your destination faster. The main reason for the success of this app is that it usually drives real-time traffic updates from fellow users. So there are really low chances of them not finding the perfect route. If you want to read more interesting business model articles, check out our other articles.

Want to create a website or blog? Looking for the best software available online? Your search has come to an end now. WordPress is the one-stop destination to build your website.

Introduction to WordPress

WordPress is a popular and leading software system available for free. Yes, you’ve heard it right!!! It is an open-source software or tool used by millions of users across the globe to build effective websites or blogs. WordPress is probably referred to as the popular self-hosted WordPress. Many businesses prefer WordPress as the tool has eye-catching themes and plugins.

Themes available on WordPress can be downloaded from WordPress.com. Within a few simple clicks, people can download themes and customise them according to their requirements. Also, the plugins available on WordPress are probably used to extend your website functionality.

Hope you understand what exactly WordPress is. Now, let’s discuss the importance of WordPress. Though there is much software available online, many developers are investing their trust in WordPress. They believe that WordPress is more important and help them in multiple ways such as adapting the latest technology, easy integration and more. Employees can make their task easier, WordPress is the best software to update, edit and delete their website content without any hassles. Since WordPress is flexible that is a key reason it has gained trusted from leading organizations to support their every-day business transactions.

Who owns WordPress?

WordPress is owned by Automattic. Matte Mullenweg is the founder of Automattic and serves in the “Board of WordPress Foundation”.

Matt Mullenweg was created Automattic in the year 2005, i.e 2 years after introducing WordPress. The key purpose is to make “WordPress Hosting” effective and allow users with no technical knowledge to create a blog with WordPress.

Since WordPress.com was powered by free and open-source software. Automattic had planned a vested interest in WordPress software further. It’s no secret that WordPress is open-source software, it doesn’t earn money. At that time, Matt registered the “WordPress trademark” through Automattic.

As WordPress grows it’s popularity and reputation, Automattic has denoted the “WordPress trademark” to the “WordPress Foundation” in the year 2010. Also, it ensures the long-term sustainability of WordPress (non-profit project). 

WordPress business model

WordPress is the leading CMS and popular blogging destination – “foundation owns the trademark”. Simply put, WordPress makes money from its donations. Also, the Foundation often hold a “public-benefit-organization”, they manage their revenues from events and conferences conducted by WordPress.

How does WordPress make money?

Many people think how can Automattic earn revenue when they’re providing WordPress software for free. If you want to know how does WordPress make money, continue reading…

Web hosting

No matter whether you’re running a start-up business or large entrepreneur, WordPress provide web hosting service to most popular business such as WSJ’s All Things D, TechCrunch, CNN and more. WordPress Hosting plan starts from $15,000 per month.

Google AdSense

Business often prefers advertisement to make money. Even free blogs that are hosted on WordPress want to earn conversions. They drive conversions and traffic through Google ads. WordPress carry Google ads and make money from it. But, Google advertisements will appear when they meet these conditions:

• The users can use multiple search engines such as Google, Yahoo and Bing. But, the user should not use the Firefox web browser.
• The visitor needs to log out their WordPress account.
• The referring source should not be powered by WordPress. Consider, when a user visit on “abc.wordpress.com” from “xyz.wordpress.com”, at that instance you might not view any ads.

Even with these conditions, WordPress is earning billion dollars every month through Google Adsense.

WordPress themes

Thinking and choosing the best theme to use to your website or web design every week is exhausting. Themes are a handy way to build an attractive website. Eye-catching themes could be an excellent way for business to execute their products or services. WordPress is offering a few themes for free. But, these themes are basic and everyone uses. So business needs to choose premium themes to make their website stand out from the crowd. WordPress is offering premium themes. The cost could probably range from $50 to $100. These themes are designed by WordPress developers. Here the commission per sale is earned by Automattic.

Premium accounts

It’s no surprise that everybody can host their blog on WordPress website for free. But with the free version, WordPress doesn’t offer few features such as storage, custom web domain and more. The premium features are used by businesses to build a user-friendly and effective website. If you choose a premium account, you need to pay $8 per month to enjoy premium features.

WordPress revenue from other sources

So far we have discussed WordPress is earning a good income from web hosting, Google AdSense, premium themes and accounts. On the other hand, Automattic is earning revenue from other sources such as dealing with other products and services, these are probably linked to “WordPress.org”.

Let’s discuss them,

Web host referrals

Referrals earn good revenue. WordPress suggests few third-party web hosts, these hosts probably provide free hosting services and allows self-hosting. Since WordPress is referring a list of web hosting providers to its users, Automattic will earn a good amount of commission on every referred sale.

It’s no surprise that web host referrals are earning good profist for Automattic. When the users search for WordPress Hosting on their search engines, with advertisements and sponsored posts, users will redirect and this way Automattic is running as a profitable business.

WordPress support

Users need support while installing the application or storing the information, all the type free WordPress support will not serve the purpose. Therefore business often consider subscribing to WordPress customer service of Automattic. The support team will provide flexible service around the clock. Also, their team will solve the issue with right solution. As per analysis, WordPress development support team will respond within less than 6 hours. WordPress support for Enterprises are paying $2.5 to $5000 every year for utlizing the customer support.

Guided Transfers

Generally business transfer their blog from one domain to another. If you;re planning to transfer your website from “WordPress.com” to “WordPress.org”, Automattic will help you. With Guided Transfers you can easily move your blog. Automattic will charge $119 on one-time transfer.

VaultPress

Backup is important. The primary purpose of doing backup is to create duplicate information that can be recovered if any data theft or failure occurs. The data failures are data corruption, virus, malware attach, deletion and more. If you’re planning to backup your blog to the cloud then ValutPress service is here to help you. Automattic is offering VaultPress package starting from $15 every month. Here your blog will be backedup in real-time and also notify when there are any potential problems.

VideoPress

Audio and video files are essential for every website. WordPress is offering VideoPress plugin to enhance your website. Install the VideoPress plugin and host videos, audio and other visual files on your website. Here the videos and audio files are served without any interruption (ads). VideoPress plugin charges $60 per year. There is no particular limit on bandwidth.

WordAds

WordAds is a leading and popular “WordPress based advertisement network” that is available to all the websites or blogs that are hosted on WordPress. WordAds is a win-win solution for the websites to provide ads that are from various platforms such as Google AdSense, Amazon a9, Yahoo, Facebook Audience Network and more. These ad buyers often work on a revenue-sharing business model with their publishers.

Conclusion

WordPress is a popular and free CMS and publishing tool available online. Small and large business prefer WordPress as it is open-source software that allows developers to build a wide range of plug-ins, widgets and themes. Over 35% of active websites are powered by WordPress on the internet. Users don’t need to have the technical knowledge to run and install WordPress. Even a non-technical user can operate WordPress without hassles.

As already discussed, WordPress is one of the popular platforms that is operated by the community. It means the platform is not acquiring any contributions. After that, WordPress decided to make money. It is offering various plans such as free, personal, premium and business plans. Also, WordPress is generating profits from other sources such as WordPress themes, premium accounts, web host referrals, WordPress support, guided transfers, VaultPress, VideoPress and WordAds. So far WordPress has earned millions of dollars by providing these services and support to businesses and individuals.