Definitions for Deal Providers

For Deal Providers:

 

DAILY DEALS

Daily Deal or Group Buying as a business model delivers promotions that are able to generate a large number of sales for retailers in a short period of time. Deals are typically offered from 40-80% off regular price and last from 1-4 days. Due to the large savings involved, Daily Deal promotions can deliver a large amount of sales and consumers in a short period of time. Consumers are made aware of these deals by email alerts or directly through website promotion.

What providers need to know:

  1. How do Daily Deal providers make money? The daily deal provider takes a marketing commission for promoting and selling retailer offers. Typically, the commission is from 25-45% of total sales.
  2. The objective is to drive sales and consumer adoption.
  3. No advertising cost is charged to retailers using the deal service.
  4. Deals are promoted to a consumer database and to an online audience
  5. The daily Deal company sells the deal to the consumers directly and then the consumer redeems the offer with the retailer. The Daily Deal company does not interact with or ships products or services.

There are 2 variations to this model:

  • the consumer is charged a small fee for the right to have the deal (typically $3-$10) and the retailer keeps 100% of the revenue.
  • the consumer is not charged anything, they are not even asked to buy the deal. They simply get the deal. Upon redemption at the retailers place of business or online, the Daily Deal provider charges the retailer a redemption fee per voucher. (typically $3-$8)

 

 

COUPONS

There are several types of business models in the couponing industry. Each has their advantages and disadvantages. Here are some models that have proven to being successful for coupon providers:

Affiliate networks: a broker of coupons and coupon codes between the retailer and publishers. Examples include commissions junction, Linkshare, shareasale among many others. Revenue source = retailer listing fees + % of retail sales from redeemed coupons/codes

Coupon sites: websites that have their primary purpose to be a listing and promotion engine for retail coupons. Examples include Red Flag Deals, Retailmenot, etc. Revenue source = affiliate commissions from retailers plus some advertising.

Grocery Coupons: websites that have their primary purpose to be a listing and promotion engine for grocery and CPG coupons, both from retailers and manufacturers. Examples include websaver.ca, save.ca, etc Revenue source = affiliate commissions from retailers, redemption fees from manufacturers plus some advertising.

Couponing Blogs:  sites that provide content and promotion of coupons. There are too many to list. Revenue source = affiliate commissions from retailers plus some advertising.

Coupon Books: published books or magazines that provide coupons to consumers. Examples include the entertainment book, plus many local coupon books. Revenue source = listing fees from retailers plus consumer purchase fee

Mobile Coupons: coupons that are searchable, available and redeemed from a mobile device. Examples include shopcatch, poynt, shopwise, clip mobile, etc. Revenue source = affiliate commissions from retailers plus listing fees from retailers, perhaps some advertising.

Portals with coupons: any consumer portal that also has coupons as an added value; so restaurant portals, regional portals, etc. There are too many to list. Revenue source = merchant listing fees

Daily Deal & Coupons Aggregators:  Sites that list coupons and daily deals by region. Examples include onespout, Dealivery, cakedeals, etc. Revenue source = affiliate commissions from daily deal providers and retailers using affiliate networks plus some advertising.

Coupon Advertising inserts: These are advertising inserts in newspapers, magazines or booklets received in the mail by consumers. They all display an array of coupons for local retailers.

Savings Cards: a membership card that enables consumers to automatically save from the retailers who participate in the program. Examples include Student Price Card, Visaperks.ca, Mastercard Priceless, other credit cards and many other savings cards. Revenue source = retailer listing fee plus consumer purchase fee.

 

 

 

FLASH SALES

Flash sales as a business model is no different that launching an online retail store. The Flash Sale provider is responsible for getting the goods to the consumer. The only two difference are that the items promoted are at 30-80% off regular price and that membership to consumers, although free, is by request. Flash sales stores work with suppliers and manufacturers in order to offer consumers amazing deals on surplus inventory or last season inventory. Flash sales last anywhere from 1-5 days and usually have a limited inventory. Consumers are made aware of these sales by an email alerts and through the Flash sales web site.

What is the difference between Flash sales and Daily deals for a retailer?

What flash sales providers need to know:

  1. How do Flash Sales providers make money? They earn a margin like any other online retailer. At times an inventory or sales bonus is included.
  2. The objective is to drive sales and consumer adoption.
  3. Flash sales sites promote manufacturer and supplier products.
  4. Deals are promoted to a consumer database and to an online audience
  5. The flash sales provider sells directly to the consumer and is responsible for all customer service, redemption and  getting the goods to the consumers.
  6. What is the difference between Flash Sales and Daily Deal?
  • Flash sales means the provider is an online retailer selling and fulfilling manufacturer goods directly to the consumer. It is an online ecommerce store.
  • Daily Deal means the provider simply sells the offer from a retailer to the consumer. But the consumer must redeem and receive the product or service by contacting the retailer directly.