People love to whine about group buying sites. Either the deals are crappy or the fine print is misleading, or their life problems can’t be solved in a $19 for $50 therapy session. Which is fair. But if you’re both savvy and persistent, you can still find good deals buried amidst the dodgy hair removal offers.
The key to financial success on the part of the deal-offering business is breakage. It refers to the amount of deals people never use. And not using a deal is probably the number one folly of deal maligners. The key is to remember what you’ve bought and when it expires, and to only buy deals you are absolutely sure of being able to use. It’s not a brilliant price for a dozen cupcakes if you never eat the cupcakes!
Shifting dealsAccording to Bob Phibbs, A New York-based retail consultant and author of the book, Groupon – Why Deep Discounts are Bad for Business, it’s important to deal with trusted businesses. “People are now finding businesses that will relimit the deal, i.e. suddenly impose limits on when customers can use a coupon or what they can purchase,” he says. Yes, Groupon or LivingSocial will refund your money if things go awry with the deal offering, but you’ve already wasted time on a bad experience.
Buying from high-quality businessesOf course, the goal of businesses in offering these deals is to bring in new customers who they hope will continue to patronize their business long after both the wag and the jag are redeemed. And some of these businesses will be worthy of your patronage. But you must do a tiny bit of research. For example, a $15 for a dozen cupcakes deal from an established and well-loved downtown bakery may be more “dealicious” than the same coupon from an upstart warehouse looking to cash in on the cupcake frenzy.
Buying from reputable dealers According to GroupBuyingCanada.com, there are around 150 deal sites and 50 aggregators in Canada, more than the per capita amount in the US and far too many deals to sift through on a daily basis. It’s best to unsubscribe from all daily deal emails and subscribe only to one or two good aggregators (like Cakedeals.com). These aggregators synthesize deals into a daily email list. They also usually sort by topic on their sites, allowing you to peruse say all the restaurant deal offerings available across the myriad deal sites in your geographic area.
Avoid deal mentalityPhibbs cautions against the deal mentality. “Deal hunters can be like rats to cheese, and what good does that do a business?” Instead, think about seeking out solid deals that are worth your time and money. “A good deal is a product that’s good for you and that’s going to outperform your expectations for it,” he says.
Deal fatigueAre all the good deals gone? Analysts say that the group buying bubble has burst, and that in many mature markets people have become jaded to the deal. But Phibbs says that with heavy hitters like Amazon (which owns Living Social) and Groupon out there, deals won’t disappear anytime soon, especially among younger demographics and in college towns, where the thirst for bargains is unquenchable. That said, the bloom is definitely off the two-for-one tulips, says Phibbs. “In general, people have moved on. Now they’re all talking about Pinterest.”