Daily deal sites what you need to know
Groupon, Living Social and Hoot are the most well known Daily Deal sites but there are many more daily deal sites and it appears that there are new sites coming to market every month.
What is all the buzz about and is it good for you’re business?
I like to simplify doing business with daily deal sites by placing them into two general categories: Local or National Retailers.
Who are the National Daily Deal retailers?
National retailers are anyone that sells mainly products. These national retailers do not need to have brick and mortar stores but they do need a good Daily deal fulfillment service to ship their products. Some of these national retailers are service franchises, travel, event and attraction companies but many of these national retailers are online sellers of products. And it appears that there are no limits to the type of products that are being offered, Jewelry, beauty products, electronics, clothing, household products you name it. Where do these products come from? Some of these products might be closeouts of brands you might know. Other products might be products that were specifically created to sell online. These products have no brand-name that anyone would be aware of, but they have consumer appeal and appear to be of good value by the online images and descriptions.
Who are the Local Daily Deal retailers?
Local retailers can be almost any type of neighborhood store that people who live in the area would visit. Restaurants, dry cleaners, car washes, spas, clothing stores, boutiques, salons just about anything that has a storefront location
The owner of the retail establishment might offer a discount on the services or products they sell such as a coupon for $50 worth of services or products for $25. These retailers usually place a limit on the number of coupons that are available at any given time.
Benefits selling on Daily Deal Sites
Are these daily deal sites good for business owners? It’s not a simple answer. While it may be good for some it might not be for others. There is abundant of pros and cons that can be found in various articles or blogs on the Internet. Our research indicates that local storefront retailers do not always make a profit on any specific coupon offer. In most cases, they lose money. They discount their everyday prices and the daily deal site gets a chunk out of the already discounted purchase price. On the upside, bringing in new customers creates brand awareness and these new customers can turn into repeat business. If that happens the storefront retailer is a winner.
The online retailer is a much different animal. These successes can be more easily measured. And more often than not, the online retailer is a winner. Sometimes the online retailer will use a daily deal site to unload overstock that they could not otherwise sell. They leverage the reach of the deal site to sell products that they had a hard time moving. But where it gets interesting, and where the real money is made is when an online store creates products specifically to be sold on daily deal sites. It’s the same old story all you need is a fine eye for products and be a good merchandiser and have a good relationship with a product fulfillment center. You can sell huge quantities of a given item because it looks great and it’s priced well.