How does value delivered to customers for free generate revenue for the business?

[NSRNest]

One of my favorite value-added browser plugins is Honey. If you're not familiar with it, it saves online shoppers tons of time and money. It works by scanning coupon codes it finds on the web and automatically enters them into the promo code field at warp speed, saving the user/customer loads of time during checkout. I just saved $5 on a $25 order using Honey.

This is just an example of a business model I see a lot...free plugins or apps that provide loads of value to its users for free. (Another example is an app I love called Genius Scan, which I've never had the need to upgrade to the paid app.)

My question is, how does this kind of business model generate revenue for its business owner?

Thanks! (My first post, so if I've somehow screwed up, please be gentle)

 

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[ManlyMansNegator]

One of my favorite value-added browser plugins is Honey. If you're not familiar with it, it saves online shoppers tons of time and money. It works by scanning coupon codes it finds on the web and automatically enters them into the promo code field at warp speed, saving the user/customer loads of time during checkout. I just saved $5 on a $25 order using Honey.

This is just an example of a business model I see a lot...free plugins or apps that provide loads of value to its users for free. (Another example is an app I love called Genius Scan, which I've never had the need to upgrade to the paid app.)

My question is, how does this kind of business model generate revenue for its business owner?

Thanks! (My first post, so if I've somehow screwed up, please be gentle)

They can either sell data they gather from users, Inject ads or a plethora of other ways.I found this on quora:

https://www.quora.com/How-do-Chrome-add-ons-make-money

"Example: Honey Chrome Extension - It is one of the most popular extension. To earn money, they rely on affiliate business model. All the major online stores such Amazon, eBay, Walmart, etc. have Affiliate Programs where you can sign up and earn commission from every sale that you bring. For example, if you have Honey (or any similar coupon provider extension) installed, whenever you use it before buying anything online, it gets some commission. Now, this commission depends on multiple factors such as the category of product, price, etc. And It can go up to 20% of your purchase. It is a very good and scalable business model. Many bloggers and marketers also depend on affiliate programs to earn money."

 

[daru]

Yeah, often they sell your personal data. Ooops! Free? Not really. You just don't pay with money but your privacy.

 

[NSRNest]

They can either sell data they gather from users, Inject ads or a plethora of other ways.I found this on quora:

https://www.quora.com/How-do-Chrome-add-ons-make-money

"Example: Honey Chrome Extension - It is one of the most popular extension. To earn money, they rely on affiliate business model. All the major online stores such Amazon, eBay, Walmart, etc. have Affiliate Programs where you can sign up and earn commission from every sale that you bring. For example, if you have Honey (or any similar coupon provider extension) installed, whenever you use it before buying anything online, it gets some commission. Now, this commission depends on multiple factors such as the category of product, price, etc. And It can go up to 20% of your purchase. It is a very good and scalable business model. Many bloggers and marketers also depend on affiliate programs to earn money."

Wow. Okay, I didn't realize that. That's not the kind of business I want to create!

 

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[NSRNest]

Though, it seems Honey in particular also relies on affiliate income. Again, not a model I want to base my business on as the affiliate rules can change and wreck the deal.