Different Types of Sites – Cash Back

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One of the ways I judge a site idea is if it already existed would you recommend it to other people, if the answer is no you have something of a none starter whilst if it’s yes then you have the beginning of a viral marketing campaign.

I enjoy browsing other sites away from my niche and getting ideas from what I think the sites have done well and not so well. There are so many similar sites around you, if you’re not first then you have to offer something different or more to differentiate your self from the crowd and give your visitors what they want. What I’d like to do is a series on different sorts of websites and what we can learn from them for our own sites, etc. First off I’m going to start with the Cashback site.

Cashback Sites

These are a new discovery for me (they’ve been round for a number years so marketing so where have I been hiding), they work the same way as cash back credit cards where if you spend money at various sites you get a percentage of the money spent back.

It’s a really cool idea as it offers your visitors a useful service (who doesn’t like saving money) whilst giving you a valid reason to push every affiliate offer under the sun.

Revenue

I’ve seen two different revenue models so far.

  • Keep a Percentage of the Affiliate Income
  • Say you earn 10% of any affiliate sales, you keep 2% (or whatever) and pass on the remainder to your vistor

  • Fixed Annual Charge
  • With this model you give your visitor/shopper 100% of any affiliate income and make your money by charging them an annual fee, this fee is taken from any cash back that they earn so your visitor doesn’t have to pay any money up front. The sites may not have as high a profit margin but it’s a great way of building a community

Marketing

These are the sorts of sites that people will come back to again and again and also share with their friends. However this can be encouraged more by providing cash back bonuses for introducing friends.

Sample Sites

Maintenance and Ongoing Work

Setting up a site like this is going to take a fair amount of development work. You’d also have to apply for and add all the required affiliate programs and create a tracking system so that you know which of you members have earned commissions. Ongoing running costs shouldn’t be too high as a lot of the work will be automated though adding new daily offers would be beneficial.

Conclusion

I do like this as a site and business idea, earning money by helping others to save money has so many different marketing opportunities. The cash back market does look pretty saturated but if you could up with a twist or some way to add more value then I’m sure it would be pretty lucrative.

About Al Carlton

Al quit the 9 to 5 rat race in January of 2007, before then he was a software engineer and systems architect of financial system. Nowadays Al spends the days running his various businesses and experimenting with different ideas and opportunities.
Al can be found on twitter at AlCarlton.

Comments

  1. “There are so many similar sites around you, if you’re not first then you have to offer something different or more to differentiate your self from the crowd”
    Totally agree. When I think about a new site, I try to think in those terms: What will I offer the visitor (that others are not offering) which will make him or her choose my site over the rest? If I cannot think of a good reason or differentiating point (which could apply to part of the target group), then I do not follow with the project… I may start doing some exceptions to this rule now. Following Scott’s posts on domains, I have bought some interesting domains, keyword rich & with low competition, so I may try to build some minisites & see how that goes… I guess the differentiating point there will be the domain name.

  2. Look for a white label option (Clue above) and differentiate your site from the rest by the way in which your market it 😉

  3. Quidco are a bit different from the others. They don’t take a cut just a £5 admin fee. So you get all the affiliate referral cash.

  4. you might be interested in PopShop for maintaining the affiliate links :hint:

  5. I have been using cashback sites for over 2 years and have made some good money. You can also be paid per click.
    Running one is a different matter.
    Regards.

  6. I’ve been using cashback sites for a while now, and earnt a few bob doing so. However, there are way to many copycats already, so making a dent in this market would be very touch.

  7. Hmmm well we have some concepts like this here in Europe. I was also interested but a lot of networks here simply do not allow it 🙁

  8. Hi,

    I did build my own cashback site from scratch a couple of years ago, when there was only a fraction of the sites there are now.

    Developing the site myself & knowing that it worked was incredibly satisfying; I was incredibly pleased with it & put 2 years hard work into it, but in the end the sad fact was that I was forced to shut it down because of the amount of fraud committed by some of my members.

    It proved to be impossible to manage the site AND keep up with all the administration/fraud prevention, so I gave up & started a white label site instead (http://www.cashbackshopper.co.uk). Because they have the all the admin, support systems & fraud prevention measures in place it leaves me with the “simple” task of marketing the site, without all the stresses of the maintaining the “back-end”.

    There are many millions of people using the Internet to buy goods online, who have never heard of cashback sites so with decent marketing, it should be possible to reach enough new users to make it worthwhile running a white label site, especially if you can offer sometyhing extra to your customers!

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