If you’re looking to earn cash back on your online purchases, chances are you’re familiar with Rakuten. Formerly known as Ebates, Rakuten is a popular cashback service that rewards its members for shopping online. But have you ever wondered how Rakuten makes money? After all, giving away cashback seems like a costly venture. In this blog post, we’ll discuss the business model of Rakuten and how the company turns a profit.
Introduction to Rakuten
Rakuten is a Japanese e-commerce company founded in 1997 that operates in various countries, including the United States, Canada, and the United Kingdom. While Rakuten provides a variety of services, such as online shopping, travel bookings, and financial services, the cashback program is its most popular offering. Members are given a percentage of their online purchases back in cash, making it an attractive incentive for shoppers.
Commission from Retailers
Have you ever wondered why Rakuten partners with specific retailers? It’s because they receive a commission for every purchase made through their website. The commission is a percentage of the sale, and it can vary depending on the retailer. By partnering with well-known brands and providing exclusive deals, Rakuten attracts new members who are interested in earning cashback on their purchases.
Rakuten also generates revenue through advertising. Retailers can pay for advertisements on the Rakuten website, which can help them reach a wider audience or promote specific deals. The amount that retailers pay for advertising can depend on factors such as the placement and duration of the ad.
Rakuten’s Affiliate Marketing Network
Affiliate marketing is a performance-based marketing model in which an advertiser pays commission to an affiliate for each customer acquired through the affiliate’s marketing efforts. Rakuten operates one of the world’s largest affiliate marketing networks, with over 150,000 partners. The affiliate marketing network offers incentives and commissions to websites, bloggers, and influencers to promote products or services on the Rakuten site. The revenue generated from affiliate marketing is also a significant source of income for Rakuten.
Rakuten’s E-Commerce Platform
Rakuten is an e-commerce platform that offers a diverse range of products and services. From electronics to clothing and home goods, Rakuten covers almost all categories. Rakuten earns money by taking a percentage of the transaction from the product or service provider that takes place on their platform. Rakuten’s e-commerce platform is one of the largest online marketplaces globally and has become the go-to platform for buyers and sellers worldwide.
Partnership with Credit Card Companies
Another way Rakuten makes money is through partnerships with credit card companies. Rakuten offers co-branded credit cards that provide additional cashback when used for eligible purchases, such as those made through Rakuten. In exchange, the credit card company pays Rakuten a percentage of the purchases made with the card.
Rakuten Super Points
In addition to cashback, Rakuten also operates a loyalty program called Rakuten Super Points. Members can earn Super Points by shopping through Rakuten or engaging with the company in other ways, such as writing product reviews or referring new members. These points can then be used to purchase items on the Rakuten website or with partner retailers. Rakuten can earn money through the Super Points program by selling products to members and receiving a percentage of the sale.
Investments and Acquisitions
Finally, Rakuten also generates revenue through investments and acquisitions. As a large e-commerce company, Rakuten has invested in various businesses that can complement its existing services or provide new opportunities for growth. Some examples of Rakuten’s investments and acquisitions include online marketplaces, ride-hailing apps, and digital content companies.
Rakuten’s Mobile App
In line with the shift toward mobile devices, Rakuten launched its mobile app in 2010. The app has become one of the most popular shopping apps worldwide. Users can access and purchase products, earn and redeem Rakuten points, and enjoy various deals and discounts. Rakuten also generates revenue through ads and partnerships with other companies via the app.
In conclusion, Rakuten is a complex business that generates revenue through various methods. While some of these methods may seem obvious, such as receiving a commission from retailers or offering advertising opportunities, others are less apparent, like the Super Points loyalty program and investments and acquisitions. Regardless of how Rakuten makes money, it’s clear that the company’s cashback program has been a successful incentive for attracting new members and retaining existing ones. Next time you use Rakuten to earn cashback on your online purchases, you’ll know a little more about how the company operates.
FAQ – How does Rakuten make money
1. What is Rakuten, and what services does it offer?
Rakuten is a Japanese e-commerce and online retail company that operates globally. It offers a wide range of services, including an online marketplace, cashback rewards program, digital content streaming, online travel booking, and financial services such as credit cards, banking, and insurance.
2. How does Rakuten make money through its cashback rewards program?
When users shop through Rakuten’s platform or app, they receive cashback rewards on their purchases. Rakuten earns money by receiving a commission from partnered retailers for driving traffic and sales to their websites. A portion of this commission is then shared with the user in the form of cashback rewards, while Rakuten retains the rest as revenue.
3. How does Rakuten earn revenue from its online marketplace?
Rakuten’s online marketplace allows third-party sellers to list and sell their products. The company generates income by charging sellers various fees, such as listing fees, transaction fees, and subscription fees for premium services. Additionally, Rakuten may earn revenue through advertising and promotional services offered to sellers on its platform.