Original post from BenifitPoint here
When I read the article on NY Times recently about the Deep Discount Daily Deal Sites phenomenon started by Groupon and then copied and recopied many times now in the U.S. and abroad, I realized I wasn’t alone in having bad experiences with these sites.
Being in business long enough to know that relationships and proper order fulfillments matter, I’ve always been wary of these new sites calling me every day wanting to promote my business through a new customer discount deal of at least 50% off the regular price.
While as a consumer, I don’t have any gripes against any of these deal sites, my issue with them is strictly as a merchant trying to survive in this tough economic environment. How does one survive this deep-discount environment where you’ve to offer at least 50% off the retail price, do a revenue share of 50/50 or 60/40, plus not get paid for at least 30 days or longer from some sites, and also offer fulfillment of 6 months or longer for the vouchers purchased? All of this with an illusory concept of up-selling, cross-selling, or any other kind of “selling” in the hope of converting the deep discounted vouchers to full-paying, happy customers! Don’t get me wrong, there’ll be some businesses where this would succeed during their slow times, with some likely survivor deal sites that execute well, are focused on uniqueness or luxury items rather than just daily deals, and who work well with merchants. But for others, I can’t wait for them to go public with sky high valuations, so I can short a little bit of their stock and recoup some of the money I’ve lost on these deals!