While I’ve been looking into Honeymoon Registries as a potential consumer of their services, I’ve also been trying to figure out how they make money to stay in business. It appears to me to be quite a profitable business scheme.
First, they charge an initial fee to set up a registry. Then, as each registry gift is purchased, they skim a high commission off the top. What’s more, they hold your gifts until your wedding, so they have the use of your funds until then. They can invest the cash and keep the interest that accrues. Pretty nice deal for them! They can also offer service add-ons, like announcement postcards, for a small fee. In essence, you’re paying for their advertising when you give out these cards to your guests. As a final kick in the butt, they typically release your gift check so late that you will want to pay extra for their special “rush” services.
Based on a sample website which shall remain anonymous, here’s my estimate of the total revenue they could earn from a couple registering for a $3,000 honeymoon.
Setup fee: $150
Commission: 15% of $3,000 = $450
Interest: 6% of $3,000 = $180
100 Announcement Cards: 100 cards @ 50c = $50
Rush service fee: $25
Total Revenue: $855
That’s $855 that could have been spent on the honeymoon itself. Ouch.