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Internet Business Idea - Cash Back Shopping Website & Loyalty Rewards Program

The Start of Cash Back Shopping

If you love to shop then you are not alone. Millions of people love to shop and they love it even more when they earn cash back rewards for their purchases. Even if you hate shopping it makes it a little more bearable when you can get cash back for your efforts.

Credit card companies are well aware of this so they offer you cash back rewards when you make purchases with their cards. Their hope is that you'll use their card exclusively to make all of your purchases instead of using cash, check, or another card. The credit card company charges the retailer a percentage of your purchase so they don't mind sharing a bit of the profit with you if it means you'll use their card more.

The Emergence of Cash Back Shopping Websites and Online Loyalty Rewards Program

Cash back rewards programs are extremely popular so it's not surprising that the trend has shifted from offline to online in the form of cash back websites. Now, not only can you get cash back from your credit card purchases but you can also get another round of rebates, rewards points, and cash by making your purchases online via these shopping rewards websites.

What Are the Best Cash Back Shopping Websites?

The market for rebates and cash back websites is steadily growing. There are dozens of sites but here are the current market leaders:

  • Ebates.com - Founded in 1998. Offers thousands of discounts, promotional codes, and coupons. Sign up for a free account and get online rebates. As of this writing their members have earned over 55 million dollars in rebates.
  • FatWallet.com - Founded in 1999 as a one page list of coupons for a few retailers. Fat Wallet quickly became popular and launched cash back shopping in June of 2001. Named one of the top 50 workplaces in America in 2010.
  • MrRebates.com - Founded in 2002. Has over 2000 stores listed and dozens of product categories.

How Do Cash Back Shopping Websites Work & How Do I Build One?

You sign up for an account on a cash back website. This allows them to track your rebates. You then click on banners or either use affiliate codes posted on the cash back websites when making your purchases. The companies you buy from pay the cash back website who then in return shares the profit with you.

There are 4 main parties involved with the cash back shopping process.

  1. The cash back website
  2. Affiliate networks such as LinkShare, Commission Junction, Google, etc...
  3. Merchants who sign up with affiliate networks to market their products or either have their own affiliate program
  4. Customers

Building the Website - Let's say you wanted to start a cash back website. Here are the steps you'd need to take to create the website.

  1. Plan your website, your unique value proposition, marketing strategy, etc... You need to come up with a strategy for competing with the established market leaders or either creating a new niche market.
  2. Find and sign up for affiliate networks and merchant affiliate programs that have API's that enable you to quickly download affiliate banners, coupons, and discount codes and upload to your website. These API's will also allow you to keep track of your earnings as well as the earnings generated by your users so you'll know when to send them payments.
  3. Register a domain name and sign up for website hosting.
  4. Hire a graphic designer to design your logo
  5. Hire a website company to design and develop your website. Provide them with your website plan and affiliate program API's and be prepared to spend a significant amount of time communicating with them to design and develop the site.
  6. Once the site is complete do a final round of testing and schedule the launch.

How Much Will it Cost to Build a Cash Back Shopping Website?

When building a cash back rewards website you'll incur the following costs:

  • Logo Design - depends on the designer, typically you can get a decent to good logo in the range between $100 to $500
  • Domain Name - annual domain registration only costs $10 but most great domains are already taken so you will either need to pay a premium price for one of these domains (several hundred or even thousand dollars) or try to come up with a good domain that is not registered yet
  • Website Hosting - to start you should be able to get by with hosting that costs less than $100 per month, but when your site becomes very popular you'll need to upgrade to a dedicated server or cloud based solution. These options may cost you several hundred dollars a month depending on your needs.
  • Website Design - you can get an attractive template for between $30 and $300, but you'll like need some custom design as well which may cost $1000 to $3000+ depending on the design complexity you require
  • Website Development - search around to see if you can find a turn-key cash back website, if not then be prepared to spend several thousand dollars for custom programming and integration of the affiliate network and merchant affiliate program API's so that you'll be able to easily keep track of your earnings and the earnings of your users
  • Rough Estimate for the Cost of Building a Cash Back Shopping Website - $5000 to $20,000 (doesn't include your time which can easily take you 100+ hours to plan, project manage, and test.)

Keep in mind that before you invest your time and money in creating the site you need to make sure you have a solid marketing strategy for attracting visitors to the website. Competing head to head with the established market leaders will be difficult unless you have a unique way to distinguish yourself and it's always helpful to have a large network of friends and family that could serve as a boost to get you started.

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