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Sweetheart Deals for Buyers and You, Part 1

Can 'daily deal' sites work for your business?

It’s no secret that people love saving money. That fact is at the heart of the success of Groupon, Woot, LivingSocial and other daily deal sites that give consumers access to big discounts on a variety of products and services.

But shoppers aren’t the only ones who love these “sweetheart” deals. Businesses love them, too, because they know shoppers have come to rely on them for an array of items and services, whether it’s a new haircut, jewelry, art, tasty treats or even a great get away. For merchants, being featured means added exposure and the possibility of greatly increasing sales. But it can also mean you’ll need a little help to keep things in order.

We talked to two online sellers who were featured on a daily deal site to see what their experiences were like and what you should consider as you look into this marketing opportunity. In our next article, we’ll explore three deal sites, tell you what you need to know about each, and show you how you can create your own daily deal, should you want to bypass the middleman.

“Offering items on a daily deals site for a limited time creates urgency to buy right away”

Do I want to be featured?

You’ll need to consider several factors as you try to decide if you want to be on a deals site, but there’s no doubt that being featured, or offering your own daily deals, can attract lots of buyers.

Being featured on one of these sites will get your business in front of thousands of eyes. The exact number depends on a deal site’s popularity, but being put in front of even just a few more potential buyers means you’ll likely get more traffic to your site, and potentially make more sales. This was true for Kelley Terrill, the owner of Owl Say Designs on Etsy, a shop filled with stylish travel accessories like luggage tags and passport covers.

She was featured twice on Heartsy, a deals site for artisans.

“The second time was much more successful that the first one,” Terrill says. “The popularity of Heartsy has grown so significantly in seven months that I went from selling 59 vouchers with the first feature to 150—the max allowed—with my second feature.”

Kavitha Murthi, the owner of JewleryDeli on Etsy, also tried her hand at Heartsy and says the experience was “fabulous.” She sold lots of vouchers to her store on the site and saw her sales increase around the time Heartsy featured her shop.

What draws buyers to daily deals? It likely has to do with the desire to stretch a buck during tough economic times, the sellers note.

“In this current day and economy, I think everyone likes a deal, and if you get good stuff for the (discounted) rates they offer, it would definitely be popular,” Murthi says.

“People still want to shop,” Terrill adds. “They have less money to spend but still want the same quality as paying full price. Sellers need to move product and are willing to sell it at a discount, rather than not sell anything at all. Offering items on a daily deals site for a limited time creates urgency to buy right away. The buyer gets a great item at a discount while the seller moves products. Everybody wins!”

“Communicating lead times up front can alleviate a lot of irritated customer emails and save you tons of time”

Things to consider

However, Terrill notes that sellers should thoroughly review the terms and conditions of the daily deal site they’re thinking of working with. Some sites charge a fee for every item sold. This might be a flat rate, or a percentage of each item or voucher sold.

Merchants should also ensure they can handle a big increase in orders. And, of course, they should consider whether they can afford to offer the discount. You are in business to make a profit after all.

“Don’t forget that the voucher amount (may) include shipping, Etsy and PayPal fees and the fee to the deal site,” Terrill says.

Remember, too, that when you offer a deal and thousands of people see it, you could more than double your current order volume—which is great for business, but could mean you’ll be very busy filling orders, packing items and making several trips to the post office. This might mean you’ll need some added help.

Start planning for that before your submit your items to a deals site. Ask friends or family if they’d be willing to pitch in if you can’t handle the increase in order volume on your own.

And if you do offer a daily deal, give yourself plenty of lead time and state it on your site through the end of the deal, Terrill advises.

“Buyers have a tendency to be myopic and not understand why you didn’t ship their single item the very next day,” she continues. “It’s sometimes hard for them to understand you sold 600 single items in that one-month period the vouchers were valid, and you’re swamped! Communicating lead times up front can alleviate a lot of irritated customer emails and save you tons of time.”

As you’re looking into the terms and conditions of deals, and weighing the pros and cons, really ask yourself if deals sites are right for you, Murthi adds.

“You have to really think it through,” she notes. “Does it work out in terms of the clients you are able to reach? Are you selling something that they will recommend others to or come back to purchase? Are you making some money on it, or is it a loss? Is the effort too much for what you are making? I looked at it as putting money aside toward advertising and marketing.”

Now you know what to consider. In Part 2, we’ll look at a few daily deal sites you can turn to, should you want to give shoppers some sweetheart deals.

About the author

Olga Munoz
Olga Munoz is editor of TheOnlineSeller.com. In addition to writing news and feature articles about e-commerce, selling trends, online marketing and other topics of interest to online sellers, Olga manages the site's social media efforts. A journalism graduate of Chico State, Olga says her favorite part of being a journalist is learning interesting facts that help put stories into perspective, attending industry events and meeting interesting people "that leave you smiling, even in tough situations." Opinions expressed here may not be shared by The Online Seller and/or its principals.

  • Kelley

    Great piece…Didn’t realize that the site dealers took a cut of the sales or vouchers 



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