Groupon! What’s the deal?

Posted by | July 17, 2011 | E-commerce, Web development | 2 Comments

A new e-commerce website trend is to build groupon sites. The goal behind Groupon sites or the like is to give members huge discounts in order to get them to try out new services, in hopes that they’ll return in the future at full price. The websites themselves earn a profit by featuring the companies, who give out a small fee to the website in order to get exposure from local sources.

Groupon! What's the deal?

It’s important to note that each deal has a very tight deadline in which it is purchasable at that price. By doing so, members must “buy the deal” within certain time periods otherwise the deal expires. Also some adds conditions that some number of people have to signup for the deal or the deal won’t go through. This can help to get old deals out the door, influence more members to make the purchase, and invite more people to joining over social media networks and keep new deals coming in fresh every day.

Why does the concept work well?

People love good deals. Companies are constantly paying for advertising space on your site and members are more inclined to take action if they know they can get it for cheaper. A good deal may also even be more effective than getting the same service completely free. A free deal may make the deal seem less valuable, or otherwise the deal seems fake or problematic. With just a hefty discount the buyer feels smarter for taking advantage of the deal.

A short time-frame creates a sense of urgency. The deal won’t last, so if they want it, they have to get it now. There is less time for logical decision making that would prevent them from not purchasing the deal.

You can also sell luxury items through your website such as spa services, nice restaurants, vacations, etc. are the deals that are featured. This has added value as many coupons and discounts today are for essential items.

The concept is a smart one, and it is quickly becoming a trend. Many new sites just like it are popping up every day, some with slight variations, and others within drastically different niches. Whatever the features, though, the concept is still a strong one because it is a win-win situation for all: the website, the businesses, and the members. So you may wanna jump on the bandwagon to while it’s still very popular. Groupon sites are making money, get some in your pockets too. But as with any business, you must work hard to make your e-business a success.


About ECA Ray

Ray is a manager at ECA Tech Inc. , Toronto's leading Ecommerce software, website development and digital marketing company. He has been a programmer for 28 years. He has some good experience in integrating designs to various software. He has volunteered in numerous IT related free training courses all over North America and contributes articles on numerous blogs. He also participates in continued education classes at local colleges.


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