Community coupon site RetailMeNot has today launched a social network on top of their coupon portal.
RetailMeNot comes from Melbourne, Australia based Stateless Systems, who would be best known to TechCrunch readers as being the company behind bypass registrations page BugMeNot. I sat down with Guy King from Stateless Systems on Friday for a demo, video above.
RetailMeNot is pushing through some amazing figures for a bootstrapped (non-funded) startup with three employees. The site averages $4 million a month in sales that are accurately recorded through affiliate channels, with only 40% of codes on the site having a direct benefit for RetailMeNot. Estimated total sales through the site are $10 million a month or approx $100 million a year. 600,000 non-affiliate clickthrus were recorded in February 2007 and 440,000 affiliate clickthrus. The site offers 71,000 coupons from 13,000 merchants and is adding 200-300 new coupons a day, 300-400 new comments per day and 9000 votes per day. Traffic and revenue grew at 20% per month through 2007. King wouldn’t tell me how much the site was making, but told me that it was profitable in seven figures.
King sees the social networking side of RetailMeNot as an extension on their core shopping community that will provide hard core bargain hunters a space to talk shopping.
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I like retailmenot (dumb name, but nice design work on the site). But I don’t understand their affiliate business model. I thought it was users who uploaded coupons they found and you could rate/comment on whether they worked etc. Clearing $4m per month? Affiliates pay to upload coupons and then give a %of fee back to them?
@ ryan - not so sure about that on this particular post:
retailmenot stands out as pretty kick-ass if you start digging into the bargain/coupon world.
and the article has actual useful numerical data points - apply whatever ’self-reported’ coefficient you personally think is appropriate.
and adding social networking to a coupon site is pretty interesting and new-ish
thanks for the good post, dr
Antje
they’re a repository for coupons. They make a cut from the affiliate coupons they upload, but the majority of coupons on the site (the split is 60/40 at the moment) they don’t make a cent from. Their way of thinking is that they don’t have to profit from every clickthru, they’d rather be the best resource for coupons rather than make money from every link; by being the best resource the rest will follow $ wise. Affiliates don’t pay to upload coupons, the site is 100% free.
The $4m figure is the amount of sales from their codes, not the $ they get (affiliate links will run at between 2-15% depending on the code). I don’t know the profit only that Guy said it was 7 figures (I presume per year as opposed to month)
The name is a play on bugmenot.
I think that both RetailMeNot and BugMeNot are great. They are directly useful to consumers, as opposed to all of these other startups who are providing products and service of dubious value to people.
Now whenever I buy something online I usually go there first to see if there are any discount codes to put in.
jon
one thing that really impressed me was that they’re not chasing a return on every coupon (like most in this space) the goal is to be the best in the field and I think they’re going about it the right way. Helps to that you save money
This is interesting, isn’t this field (a site with lists of coupons for a specific website) super crowded with tons of Web 1.0 companies already all over the place?
I’m very curious on how a relatively new site playing in such a competitive space can get so much traction is such a short time.
This is a Purple Cow with a strange but profitable business model.
jamboree
fair call. The site embraces a lot of Web 2.0 ideas, such a voting, comments etc as opposed to being just a here’s my coupon. They also allow people to upload their own coupons, so instead of simply pushing coupons/ links that they profit from, they’re in part organized forum as well and I think this is the key: it’s not just what they put up, it’s the community contribution as well, and they’ve tapped into that. Hence the social network now, it’s an extension of the already existing community.
@jamboree.
They gain traction out of the simple yet innovate product they provide and Duncan is right it has a lot of web 2.0 flair to it which adds to the fire.
@Duncan Riley
In my eyes its a looks a little rough for a $10 million a month operation, but who am I to judge? Does it really only have three employees? Who are they and what kind of connections to they have to the web 2.0 world?
“I’m very curious on how a relatively new site playing in such a competitive space can get so much traction is such a short time.”
I wondered the same thing when I found myself automatically hitting their site first when looking for a coupon the other week rather than just googling like usual. In a sea of spammy, blinky-ad-filled, rough-around-the-edges coupon sites, they are a reliable source and easy on the eyes. I’m simply trusting that they have a sufficiently good enough selection and saving myself the hassle. I’m guessing others have been feeling the same way. The coupon sites always seem to have the same codes anyway. At least RMN has voting.
She is fabulous. Love her dress. I just found her hot photos on a celeb and millionaire dating site myrichmatch..com. It’s said there are lots of models or even hoollywood star on that site. The rumor says Charlie Sheen found his love on that site last May.
@Boring Market
In terms of connections it’s really just a company with smart and well implemented ideas. Obviously it’s a bonus that bugmenot was such a huge international hit, but it still very much bootstrapped.
I spent 2 hours with the CEO in his office Friday. They have 3 employees, honest
@Boring
you don’t need VC and connections necessarily;
look at Hotornot, PlentyofFish…and Craigslist
they all started small, with neither - and blossomed
@Duncan Riley and lawrence
I’m not saying a company/start-up needs VC or connections, but it sure helps. I like when the underdog rises, it shows passion and determination. I think with the use of the internet, anything is possible. Look at Tech Crunch, this would not be a business in any traditional media…but that is another story altogether.
I think bugmenot.com keeps going down, high traffic maybe due to this story?
For a site started last year I think they are doing very well and I think the interactivity is also getting people come back and not just coupons. I think that is a good strategy.
@Boring
usually anything that grows virally is good.
vs.
VC cash, where you have so much - and spent it to shove your concept down people’s throats…hoping they’ll like it and return
Broing Market
from what I got from Guy they have hosting issues with BugMeNot, it’s basically treated like a Torrent site, so unlike RetailMeNot they cant host it on an everyday server.
@Duncan Riley
A torrent site? I’ll ask the obvious question. Why is that necessary and/or is there a reason for it?
Boring Market
they were labelled as a hacker site by Google. By subverting compulsory registration, they’ve had issues similar to a torrent site; they’re certainly not identical in end use, but similar hosting difficulties, at least that is what I was told
ok so they’;re not doing $4m/month in direct revenue but rather as pass through revenue. Say I use a coupon for fotolia (just used one actually) that saves me 10% or whatever, if uploaded by selling the code, they get cut? I’m still a bit fuzzy.
But I do find myself almost always checking this site before I hit “buy”. Wish they’d give % discounts for air travel!!! I like their design a lot too (repeating myself I know).
coupons are great, and network around them would work great too. congrats to RetailMeNot team.
http://www.tech-exposed.com
A social community can only help increase useer retention on the site. Allowing individuals the ability to interact with their own coupons is a great idea.
I would LOVE to see more techcrunch writeups on companies like this. outside the valley, a real business model, no funding, and raking in cash. what’s not to love about that story?
I think this just shows if you slap some buzz terms on an old concept you get hype. Look at the traffic stats of global retailmenot compared to US only sites like Fatwallet, UK only HotUKDeals, Canada only RedFlagDeals.
Retailmenot are small fry compared to the ’social shopping’ sites that are already out there with massive communities.
Since when did voting and comments become Web 2.0. We had this before the arrival of AJAX you know… Perhaps the way they do it could be called 2.0., but the actual votes and comments are definitly Web 1.0.
Sure retailmenot might be good for consumers, but it is a nightmare for retailers. Most of the coupons are unauthorized and its against the terms of many of their affiliate relationships. Affiliates simply aren’t allowed to post coupons that weren’t sent through the affiliate channel. That’s why only 40% of their links are commissionable. I know first hand of many merchants who have dropped retailmenot from their program because of this behavior. This site is considered unethical in affiliate circles because they post exclusive codes created for exclusive distribution by their competitors. So those web 1.0 coupon sites are having all their coupons stolen and distributed through retailmenot. They take away all the control from retailers in where their coupons can be distributed.
@Scott, you say the coupons are unauthorized etc… If I go shopping at Coles and get some coupon on my shop-a-docket for half prize pizza for quoting some special code when I order, is it “unethical” for me to tell my mates? I don’t see RetailMeNot as any different to this.
You also say RetailMeNot post codes created specifically for other sites. I thought RetailMeNot was user contributed. If someone is going to another site, getting a coupon, and then using RetailMeNot to tell everyone else about that coupon, I don’t see how that can be considered unethical. I guess it’s no different to me giving you a coupon for something and saying only *you* can use it, and then you tell a friend, who tells his friends, and then they all come to me trying to use the coupon i gave you. Whose fault is that?
@Scott - as the owner of several online stores I’ve actually found retailmenot to be a great new marketing channel alongside the other deals sites.
We’ve never really understood the concept of trying to maintain “exclusive coupons” so much as we haven’t had “exclusive deals” or “exclusive sales” in our inventory.
The whole idea of coupons as a marketing channel is to *encourage* people to tell friends about them and to drive new customers to our stores. In this regard, retailmenot has been very effective and has been in our top 3 affiliates for the last 6 months.
@Tigger Rules are rules and if a merchants terms of service says you are not supposed to post unauthorized coupons, then you are breaching the contract if you are an affiliate for that program and post unauthorized coupons. Breaching a contract is a clear violation of any ethics I have. Especially when it’s not a big secret. Affiliates know what coupons they are supposed to post and what’s off limits.
As for your other comment, that’s a pitfall of accepting user generated content. You have to take responsibility for what they do. If a merchant gives me an EXCLUSIVE coupon then it’s exclusively for me, not for everyone else to use. Placing the blame on the consumer who has NO IDEA what goes on behind the scenes does not erase the affiliates ethical responsibilities.
So your comparisons really aren’t valid. This is a business; an industry, not a friendly conversation between friends.
@Jennifer
shut up you fat whore
ps. show me tits
@Jennifer
If a merchant gives YOU an exclusive coupon and YOU tell your users what that coupon is via YOUR website, then you only have yourself to blame for your users telling other people about your coupons. Whether they tell people via email, phone, text, verbal, or via the use of RetailMeNot, makes absolutely no difference in my opinion.
If you don’t want your “exclusive” coupons falling into other peoples hands, then don’t tell people what the coupon is. Find some way for them to relinquish said coupon without actually seeing it… Or make it single use so they won’t give it to other people. Or something along those lines. Or simply ask your users not to share. I just don’t understand your thinking at all, you want to give people your coupons but not have them give it to other people? Madness.
My Guess is that 90% of these comments are from RMN staff or associates…
Too bad it’s all just the prepackaged SocialEngine (http://www.socialengine.net/). Lame this even got coverage as a “launch”. The revenues are impressive, but there are literally thousands of niche social networks based on SocialEngine.
@DJ — looking at the source of RMN Community and Social Engine demo, you are completely right. Coding up a social network is not difficult technologically in the first place anyway, but it is always easier and faster to start from an existing platform than from scratch. Guy Kawasaki would agree!
I guess they just don’t want to be diverged from their ultimate goal — PROFIT!
I can’t believe this made the cut. There is ultimately no business here.
The model is wholly dependent on happy retailers signing up and providing revenue. Search for Gap, Target or Nordstrom in their system. At one point there were coupons, now you get a blank page with a message saying that:
Gap “has specifically requested to have all user contributed coupons removed.”
Same goes for literally hundreds of other stores (BlueFly, Red Envelope, Sharper Image, Cooking.com, 1800flowers, Bed Bath & Beyond, etc). Probably more every month. Eventually, all the stores catch on and there is no revenue!
Surprised to see the article but also surprised to see this rather obvious flaw not make the article!
They should have incorporated the social network into their firefox plugin.
Nice site didn’t think they make that much money though! astounding
If so many affiliates are asking RMN to remove deals from their site since they are not approved to be user-contributed, how do other deal sites pull it off? How could a site like this one be successful, and not piss off the stores?
RetailMeNot is a great site for online saving coupons. I like the design of the store, I agree that the name is kind of funny but the site is great.
retailmenot sucks for coupons most do not work. many other coupon sites have much better deals and coupons that actually word.
Wow, the numbers for retailmenot are really impressive. That said, it is not my favorite coupons site. I prefer either http://www.earnedpenny.com or http://www.techbargains.com as my personal favorites.