[birudeghi]

A very timely news for something I've been working on lately.

It goes without saying that there's conflict of interest, but the interesting bit is such conflict arises because of crude thinking from the execs about what makes discount code works.

Discounts is a form of marketing, simple as that. If your company sells products at a discount, it means that you're spending extra marketing cost to sell higher volumes. Anyone in the middle distributing this discount information will charge extra for their service.

Anyone competing to charge companies for marketing can only meaningfully compete on cost and reach. In terms of cost, most discount code websites tend to only give small discounts to consumers as the 'sales' cost is internalised in other forms, e.g. commission, so only a fraction gets passed on to them.

At the end of the day, these kinds of businesses will fight to find any margins possible, however small, to keep the company afloat because competition will erode these margins away through price reductions to these companies.

This is why Honey is the way it is now, because the incentives forces them to do so. It is harmful to end consumers as they have no $$ on the table to influence this large incentives.

Honey doesn't have to do this, but they think they do probably because most companies around them are doing the same, so why not? But there's examples (like x.com) to show that you CAN charge consumers directly, and they'll pay handsomely if your product is good enough.

That's why I'm starting Pence (https://pence.so), where I charge consumers directly for giving them better deals. I don't charge merchants because of long-term incentive alignment for end consumers. The supply of deals comes from marketing emails that you and I receive, and these companies are sending them for almost nothing as email is a free protocol.

Feel free to challenge me, as there's obvious concerns I've anticipated for my product, but I think it's one valid way to think about this issue differently.