Daily deals website

Idbatterim

hey guys, any recommendations on good books or any material, that would give me an in depth information on these sites and everything that is involved in setting one up and running it? Or if any users have experience of the industry or developing a site, please let me know. Thanks!

braddun

look at bargins at board ie

jimmii

About a year ago there were people asking the same every couple of days! Have a search of the forum and read up in those. Unless you have a ton of money for marketing its next to impossible to gain any market share. All the large deals sites here are backed by big companies with deep pockets.

adamrooney

Idbatterim wrote: »

hey guys, any recommendations on good books or any material, that would give me an in depth information on these sites and everything that is involved in setting one up and running it? Or if any users have experience of the industry or developing a site, please let me know. Thanks!

As another person has said, you will need a significant amount of capital to gain any kind of market share. I was involved in one a couple of years back, and in the end we just didn't have enough capital to keep going. We had a good USP and were different to any of the other sites in the market. The team that was involved in it, we were all marketeers and developers but even that was not enough to sustain the capital that was needed. If your target market is Ireland, there is just too much competition for such a small market. Unless you have the capital to penetrate the market reasonably quickly, my advice would be stay away from it.

jmcc

Idbatterim wrote: »

hey guys, any recommendations on good books or any material, that would give me an in depth information on these sites and everything that is involved in setting one up and running it? Or if any users have experience of the industry or developing a site, please let me know. Thanks!

A few years ago, Groupon was all the rage and even the Irish Times digital media subsidiary cybersquatted groupon.ie (Groupon took a WIPO action to recover it.) However that model spawned a few hundred Irish attempts at deals sites. Most of them didn't last very long due to a combination of poor funding, poor management, poor advertising, high expectations and very little revenue. The coupon culture that Groupon and similar deals sites depends on isn't really as widespread in the Irish market as the US. Store loyalty cards (Tesco etc) are far more popular here. The other factor is that a lot of discretionary income was wiped out of the economy in recent years so that's another hurdle for deals sites. A few have focused on particular niches (students etc) but I don't think that they lasted long. The Independent newspaper even set up its own deals site but it has the advantage of being able to advertise to its readers.

As others have said above, it really isn't a great niche.

Regards...jmcc

NotaSheep

As others have already said, this market is well saturated and probably at the point where the supply exceeds the demand. If all you are looking to provide is a 'me too' type product, then it will be the waste of your time and resources.

Idbatterim

thanks for the replies, I remember reading a lot of these threads about a year back as mentioned, the idea I have is slightly different than what the current players are offering. I currently run a company, wouldnt use what is being offered at the moment, but would go with what I have in mind. Now the thing is, I appreciate it could be quite risky, I appreciate the marketing side, but have a few ideas on how I could get this to finance itself. Marketing aside, roughly what would it cost to set up such a site and how long would it take?

Basically there would be the front end, companies would be able to upload their own deals, I would simply approve or decline them. Then there would also be a registered user database, am I missing anything on the software end?

Graham

This type of site became so common a few years ago that you can buy an off-the-shelf daily deals site script. I wouldn't risk any more than the couple of hundred they can be bought for.

Idbatterim

yeah I am aware of them, I found a lot of them looked pretty poor though, also do they have the functionality of allowing companies to upload their own deals and then you simply approve or decline them?

Graham

Idbatterim wrote: »

yeah I am aware of them, I found a lot of them looked pretty poor though, also do they have the functionality of allowing companies to upload their own deals and then you simply approve or decline them?

Do it manually (or outsource the manual work) until you have proved there is a market that you can reach.

Also read this thread http://www.boards.ie/vbulletin/showthread.php?p=85652324

Atomico

Developing the site is the easy part - the real challenge is profitable customer acquisition. Your competitors have deep pockets and can afford to spend fortunes on Google AdWords, display advertising, social media campaigns and so on. Acquiring an audience for a deals site is very expensive. Groupon ran at a massive loss on investors money for the first few years, and even now I am not sure if they are making all that much of a profit.

If you think about it, if it is so easy to set up a deals site and there is virtually no barrier to entry, then why isn't everyone doing it and making money from it?

beauf

Biggest problem with those kinda sites is the deals are poor. Often have a catch that makes far less a bargain. Any time I sign up, my spam filters go crazy. So much so its not worth the hassle. I would assume people realize this over time resulting in few people signing up, and lots of people signing off. Hardly ever hear people mention them anymore.

Atomico

beauf wrote: »

Biggest problem with those kinda sites is the deals are poor. Often have a catch that makes far less a bargain. Any time I sign up, my spam filters go crazy. So much so its not worth the hassle. I would assume people realize this over time resulting in few people signing up, and lots of people signing off. Hardly ever hear people mention them anymore.

People are over the whole 'deals' thing. Sure every shop you go to these days has some sort of deal or x% off on the go practically all the time.

jimmii

Yeh shops kind of copped on to the fact that they could easily run similar offers themselves and it would be WAY better value for them! The only value in using the deals sites is from the customers who buy a voucher and don't use it not really the best way to try gain long term customers!

makeandcreate

jimmii wrote: »

Yeh shops kind of copped on to the fact that they could easily run similar offers themselves and it would be WAY better value for them! The only value in using the deals sites is from the customers who buy a voucher and don't use it not really the best way to try gain long term customers!

As far as I know Living Social, Groupon etc only reimburse used vouchers not the number sold - so even then the retailer looses out. And therefore have to wait until after the expiry date to get the revenue - far too long for most cash strapped business owners. There were some businesses in the UK that are purported to have gone out of business on the back of groupon overbooks (hairdressers, beauticians etc) - too many clients with 70% off vouchers led to needing more staff - then not getting the payment for unclaimed vouchers.

delahuntv

makeandcreate wrote: »

As far as I know Living Social, Groupon etc only reimburse used vouchers not the number sold - so even then the retailer looses out. And therefore have to wait until after the expiry date to get the revenue - far too long for most cash strapped business owners. There were some businesses in the UK that are purported to have gone out of business on the back of groupon overbooks (hairdressers, beauticians etc) - too many clients with 70% off vouchers led to needing more staff - then not getting the payment for unclaimed vouchers.

Nope - the retailer gets paid for all deals sold. Usually 80% is paid within 7days or 14 days and the 20% balance is paid after expiry or 3 months.

Groupon and living social did have high pressure sales tactics and sold deals to anybody and this led to businesses not calcuatng cost properly and going bust.

GrabOne is probably best example out there for how the business have changed. GrabOne is owned by Independent newspapers - so again, deep pockets and benefit of national advertising

makeandcreate

Thanks for that - good to know. My reply was based upon what I was told by a retailer about 3 years ago when the whole deal sector was booming. I'd bought deals and then not used them and assumed the retailer would be paid for them but this one explained to me that they weren't - and that they didn't see any money until long after the promotion.

Idbatterim

Yeh shops kind of copped on to the fact that they could easily run similar offers themselves and it would be WAY better value for them! The only value in using the deals sites is from the customers who buy a voucher and don't use it not really the best way to try gain long term customers!

ok you can run a similar offer yourself, I have a newsletter with 13,000 subscribed, Groupon, living social etc have a database of several hundred thousand...

IRE60

Strange, this is an article from 2011 (link posted here around that time). I set out, for the retailers, the actual variables at play in that area and what the real cost could be given those variables.

http://www.ilevel.ie/media-blog/digital/daily-deal-and-coupon-calculator

The interim results for the Indo were published last week and they mention that the money only started coming in for GrabOne once they changed strategic direction and looked at higher value products.

But the daily deals sites are not always to blame for poor revenue streams...

I did a daily deal gig in October for a months membership of a gym at a heavy discount. Only one month, no strings. Not too far from me and was convenient and it had a pool as that's about all I'm interested in. Did the months and enjoyed it........

I have never been approached by anyone from the gym about full time membership since! No that's a bit of a waste!

jimmii

Idbatterim wrote: »

ok you can run a similar offer yourself, I have a newsletter with 13,000 subscribed, Groupon, living social etc have a database of several hundred thousand...

If we run an offer on our Facebook page it gets more people taking it than we got running one with one of the large deal sites and our margin is WAY bigger and it is therefor a hell of a lot more profitable the only thing with using the large deal sites is you reach a lot of potential new customers. A lot of people would have signed up for those deals when they launched but I would imagine the percentage of active users they have is very low.

zAbbo

This comes up every few months, and there's certainly a lack of understanding around Daily Deal websites.

My advice is if you are interested in this space, to look at an affiliate model rather than compete directly with the big players. There's space in that market for sure.

To give you an idea, GrabOne have a team of 50 people (tech, copywriters, admin, sales, marketing, analysts), a budget greater than yours, and the backing of a large media network.

I wouldn't recommend trying to compete when they have a 4 year head-start.

There was a period in 2011 when a new site launched every week, and then they all folded 1 by 1.

Interesting space though.

FYI. I was head of marketing for GrabOne.

Idbatterim

thanks for the information Zabbo, I have been toying with the idea for ages now, the thing is I need a book or consultant etc to give me a comprehensive understanding of all that is involved, more on the software side.

Do you know of any developers of the software who could give me an idea of cost and duration to complete the development? It is the thing I would contemplate if the initial outlay wasnt that large, i.e I wouldnt lose the clothes on my back if it didnt work out...

zAbbo

You still want to compete? If you don't have the technical resources - how will you compete against the marketing teams from the main websites?

Trust me, it really isn't as simple as most people think of approaching a few merchants and running a few deals. Build it and they will come doesn't work in this space, unless you're hyper niche.

Most guys have a subscriber database of 500k+

What you're not seeing (and this is just platform)

- Enterprise email provider
- Bespoke ecommerce platform (and integrations)
- Merchant backend
- Personalisation
- Marketing automation & customer analytics
- Ongoing Support

That's off the top of my head. There's a reason these companies have 20+ developers...

If you are hellbent on trying this anyway, you are going to waste time and money - I'm sure there's a WordPress plugin / Clone script that will give you a very basic backend + frontend.

By the way - most deal sites won't be deal sites much longer, they've already evolved...

Good luck!

Atomico

Idbatterim wrote: »

thanks for the information Zabbo, I have been toying with the idea for ages now, the thing is I need a book or consultant etc to give me a comprehensive understanding of all that is involved, more on the software side.

Em, you don't need a book or consultant, you need to crunch the numbers and figure out if it is going to work profit / acquisition wise. You are falling into the trap a lot of people fall into - focusing on the development side instead of the marketing side.

Idbatterim wrote: »

Do you know of any developers of the software who could give me an idea of cost and duration to complete the development? It is the thing I would contemplate if the initial outlay wasnt that large, i.e I wouldnt lose the clothes on my back if it didnt work out...

As mentioned, you could have a daily deals site up and running in a few hours using a clone / script. Trust me, if you lose the clothes on your back it will be on advertising, marketing and sales - not on web development.

Idbatterim

sorry to bump this, but in terms of the email mailing list, how important are these? I personally use mydealpages.ie now I am not sure everyone knows of this. The only thing I am interested in is choice and a good deal. I couldnt care less whether the deal is from groupon or any of the god knows how many other players. My point being, I dont even bother checking the emails from the various deal companies I am signed up to anymore, I simply use mydealpages.ie I have actually met the guy that set up the page years ago, when he worked for a corporate daily deals company and my company ran a campaign with them...

_Brian

I must search for a link but I read a study that reported on the customer type that buy through any of the deals pages.
The basic run of it was that they aren't loyal customers and the chances of them buying a full price product was near zero. They simply hung about waiting on a similar deal from anyone if they needed another similar item.

How many businesses here can say that their regular business has substantially increased on the back of running a deal ?? Or does it work for specific business types better than others??

guitarrrszz

people would be suprised the cost of having an email response software for a few thousand people