How does Ebates work? A lesson in sharing

My aunt recently introduced me to Ebates. She is the queen of savvy shopping, so when she told me that there were no strings attached, I believed her. (Power to WOM marketing.)

For me, as a consumer, the concept was simple: I purchase from partnering online retailers using the Ebates website. And I get a rebate for each purchase.

For Ebates as a business, however, the model was confusing to me. How were they making their money? And they are making money – in 2013, Ebates generated over $2.2 billion in gross merchandise value, which added up to over $167 million in revenue.

I wasn’t the only one wondering. Approximately 2900 people are wondering that self-same thing on a monthly basis:

So…how does Ebates work? And what makes them so successful, with such a loyal customer base?

Turns out it’s a good old fashioned profit-sharing model. An oldie but a goodie. It’s a great way to incentivize, but I never thought to apply it to an affiliate website.

Ebates acts as a giant affiliate website for many online retailers. So when you purchase anything through their site, Ebates makes money.

Here’s the simple genius of it, though – so do you. In essence, Ebates is thanking you for using their site by paying you a percentage of what they’re earning. In essence Ebates is thanking you for using their site.

Talk about incentivizing!

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