How does Houzz Make Money | Houzz business model explained

Houzz is a well-known website for interior design and home remodeling. Adi Tatarko and Alon Cohen launched it in 2009 after seeing a lack of a dedicated online platform to assist homeowners in connecting with specialists in the home design and renovation business while struggling with their own home remodeling project.

Houzz currently provides a wide collection of images, information, and items connected to home design and remodeling to over 40 million unique visitors each month. We shall examine the various revenue streams used by Houzz in this article.

1. Advertising

Houzz is an attractive advertising platform for companies in the home improvement market since it has a large user base of homeowners who are actively seeking for home renovation and design ideas.

Via Houzz’s advertising network, which offers a variety of ad forms like sponsored items, sponsored images and sponsored stories, businesses may promote their goods and services. Millions of people who are already interested in interior design and home remodeling can see these advertisements since they run on the Houzz website and mobile app.

Businesses may reach certain audiences based on things like geography, hobbies and behaviors with the help of Houzz’s advertising platform, which also offers them the ability to personalize advertising. As a result, companies may target homeowners who are most likely to be interested in their goods and services, boosting the efficiency of their advertising campaigns.

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2. Houzz Pro+

Houzz Pro+ is a premium membership service provided by the home design and remodeling website Houzz. It is designed for professionals working in the home sector such as architects, builders and interior designers, who want to network with new clients, market their products and grow their businesses.

Home service providers may boost their exposure on the platform and bring in more clients with the help of a number of benefits and features offered by Houzz Pro+. Users may build a professional profile, display their portfolio, and use data to monitor their success for a monthly charge.

Also, they may take part in Houzz’s “Find a Pro” directory, which matches local contractors with homeowners’ project needs.

Houzz Pro+ has been a great income generator for the company because of the sizeable quantity of recurring revenue our consumers provide.

Houzz has also developed a devoted following of house professionals as a result of the service, who depend on the website for brand recognition and professional success.

Subscription Tier	Basic	Essential	Ultimate
Monthly Price	$55	$65	$199
Profile Visibility	Local	Regional	National
Product Discounts	✓	✓	✓
Project Management Tools	✓	✓	✓
Lead Management Tools	✓	✓	✓
Dedicated Support	–	✓	✓
Customized Call Tracking	–	–	✓
Featured Pro Directory Placement	–	–	✓
Houzz Site Analytics	–	–	✓
Unlimited Photo Storage	–	–	✓

3. Houzz Marketplace

At Houzz Marketplace, a wide range of home items, including furniture, lighting, accessories, appliances and more, are offered online. Consumers may pick from a choice of well chosen goods that have been sourced from several merchants, designers and brands.

Houzz Marketplace, which claims over 40 million monthly users, is a fantastic platform for merchants to increase their consumer base and revenues.

Houzz Marketplace also provides a variety of services for vendors including marketing and promotion to assist with attracting their intended market. Moreover, they give sellers information and insights to assist them enhance their listings and sales. A seller support staff is also available on Houzz to help with any questions or problems that may come up.

The Marketplace contributes significantly to Houzz’s income. As every sale that occurs on the website carries a commission, they have the ability to profit from the deals that sellers make. Since it was originally launched, the Houzz Marketplace has swiftly expanded, frequently introducing new sellers and items.

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4. Houzz Credit Card

The Houzz Credit Card not only offers clients a simple method to pay for their home renovation projects, but it also generates income for Houzz.

The Houzz Credit Card offers $50 in welcome bonuses, up to 5% cashback benefits on all purchases made on the Houzz website and unique financing alternatives for bigger purchases. This encourages users to make purchases through the Houzz website increasing income for the business.

Also, the Houzz Credit Card has no annual charge and provides fraud protection in addition to other security features, which may draw in additional users who are worried about the security of their financial information.

By introducing its own credit card, Houzz is able to improve its services and marketing strategies as well as compile more client information. This may lead to more targeted advertising and better customized customer suggestions, which would ultimately increase customer retention and revenue for the company.

5. Affiliate marketing

Affiliate marketing includes promoting the goods or services of other businesses while earning a commission for each sale generated via a special referral link.

Collaboration with furniture and home décor businesses is one way Houzz may use affiliate marketing. Houzz might compile a chosen list of items that are well-liked by its consumers and highlight them on its website. Houzz would get a commission for each sale made through each product’s particular referral link, which would be provided.

Partnering with service providers like contractors or interior designers is another way Houzz may use affiliate marketing. Houzz could advertise these service providers on its website and get money from each client that uses Houzz to engage them.

Houzz might utilize its huge user-generated content database to advertise affiliate goods or services. For example, if a user uploads a picture of their freshly renovated kitchen, Houzz may include links to the goods and services that were utilized in the project.

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6. Lead generation

Houzz offers customized leads to home professionals through its Pro+ advertising package based on parameters like location, project type and budget.

Then, using the platform, professionals may buy these leads and get in touch with potential customers directly. Each lead that a professional purchases through Houzz is subject to a fee, providing the business with a reliable source of income.

Houzz has found success in its lead generating service, which contributes significantly to the company’s overall income. Also, the service has contributed to Houzz’s growth as a useful tool for homeowners wanting to hire trustworthy contractors for home design and remodeling projects.

7. Trade Program

The Trade Program is designed for trade professionals including interior designers, architects, builders and others who routinely buy goods and services for their customers. Professionals who enroll in the Trade Program may save up to 50% off retail pricing on thousands of items from leading manufacturers including furniture, lighting and home décor.

The Trade Program offers professionals not just savings but also direct access to Houzz’s trade team, who may help with product selection, pricing and order fulfillment. Houzz and industry experts can benefit from repeat customers and higher income as a result of the strong connections that are cultivated as a result of this level of service.

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How much is Houzz worth?

According to reports, the company was valued at $4 billion in 2019, after raising $400 million in a funding round led by Iconiq Capital.

Conclusion

By developing a platform that connects homeowners, house experts and product suppliers, Houzz has effectively altered the home remodeling and design market. The company’s marketplace contributes significantly to its income, which is mostly derived from advertising and commissions from product sales.

Houzz is a global leader in its industry because to its creative approach to incorporating technology into the home design process. The business has increased its offerings to fulfill consumer demand through strategic alliances and acquisitions, turning into a one-stop shop for all requirements in home design and remodeling.

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