By Adam Jusko, ProudMoney.com, adam@proudmoney.com
Consumer Reports is well-known for not taking free products from companies it reviews, and it’s well-known for not allowing advertising in its print magazine or on its online site. In fact, Consumer Reports purchases everything it reviews, then re-sells it afterwards — meaning it costs a lot to do what they do.
So how does it make money?
#1 Subscriptions
The obvious way Consumer Reports makes money is through subscriptions. It costs $39 per year for an online subscription. Consumer Reports in print magazine form costs $30 per year. Or you could get both at a cost of $59 per year. (Is it worth buying in an age of so many free reviews elsewhere?)
#2 Donations
Consumer Reports is a non-profit, 501(c)(3) organization. That means you can donate to Consumer Reports in the same way that you would any other non-profit charitable organization. You can even deduct such contributions on your tax return. Note, however, that donating to Consumer Reports is not the same as subscribing — in order to get the tax benefit, you have to give the money without getting anything of monetary value in return. In other words, you can’t deduct the Consumer Reports magazine or online subscription cost from your taxes, because in that case you are purchasing a product with actual value. (If you subscribe as a business, you might be able to write it off on your business’s taxes, though.)
It Ain’t Easy
Many of Consumer Reports‘ online competitors not only take products from their manufacturers to review them, but they also get a cut of the sales when they recommend them to you and you buy them. That’s a clear conflict of interest. Consumer Reports gets its money from those willing to pay for its unbiased reviews or donate to its consumer protection mission. It’s not an easy position to take in this era of Amazon.com reviews and thousands of free product review sites, but so far Consumer Reports continues to make enough money to provide its unique reviews and content.