Friday, March 25, 2011

Bargain Hunting in Malaysia or Should I use Groupon-clone sites for my Business?

Love cutting coupons? There's a better way! Check out these websites... I've listed a few in my previous posts - Groupsmore, Milkadeal, Mydeal to name a few.

Rather than reinvent the wheel - There are actually nearly 40 over such sites listed here (check out the comments area too)-

How do these works?
These sites offer discounts up to 90% for SPA treatements, mani/pedi, meals, food stuff, etc.. Some of them offer free credit for the first purchase and for referring friends so do take advantage of them.

You agree to a deal and once enough people sign up, you pay and you get a coupon to claim your discount. That's why it's called a groupon (group+coupon!)

What does this mean for the consumer?
Great news! You can go looking for the next bargain and stick with it if you really like the service/the product. Or you can always wait for the next bargain!

What does this mean for the business?
Not so great news. Such websites can be great publicity but they must be able to deal with extra demand for their services/goods and wow, they have do be really good to make sure that customers keep coming back for more even without those massive discounts. You see the business will have to pay the website a cut of the remaining % and offer the service/product at really low margins or even at a loss!

Example : My burger is RM10. I ask groupon clone site to offer 50% off. So I get RM 5 for every coupon sold. Maybe.. every RM 2 goes to the groupon clone site for offering it.

If you gain yourself a loyal customer, great! But the biggest danger is that this may spark a price war and the smaller business cannot afford to do so and will close shop eventually and also generally, may cause business to lower their prices and accordingly, their margins suffer.

So,if you're a business, think carefully!

In fact, you must do the math - -Ask youself - can my business afford this and also take in this huge sudden demand because of my promotion?

But hey, if you're a consumer, rock on and enjoy all the sweet deals and save some money!

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