These days there are so many deal sites springing up that it can be difficult to tell them apart. Part of the reason is that consumers today have become more deal conscious than in the past. If you’ve ever heard of Groupon or any other deal site but just haven’t gotten around to taking advantage of them yet, this post is for you.
Groupon and Group Buying Deal Sites
Deal sites tend to work one of three ways. The most popular seems to be the group buying model used by Groupon. The way it works is that sites like Groupon approach local businesses with a pitch that the deal site can bring more new business to these local businesses than traditional advertising by allowing the deal website to sell business’s offerings as a “deal”-if the deal site can get enough buyers to purchase the deal. Businesses like the fact that instead of spending money on advertising, they’re actually receiving money from the customers buying the deals.
As a consumer you can look at it as if you’re buying a discounted gift certificate from a local business. However, unlike a traditional gift certificate most group buying deals are only good for that particular deal and only if enough people buy it.
Benefits: You can pocket savings of between 40 to 50% or more on these types of deals.
Risks: If the deal doesn’t meet the required number of sales then your deal is refunded and forfeited. Make sure you read the fine print as many deals have limitations and expiration dates.
Fat Wallet and Revenue Sharing Deal Sites
Another popular deal website model is the type of deal site that shares revenue with visitors who buy products that are listed on those deal sites. Essentially, these websites are acting as affiliates of the retailers listed on their websites.
Let’s say that you visit a deal site like Fat Wallet. Once you’re there you can navigate to their forums, categories, or other internal pages to find deals. If it’s a revenue sharing deal, you will be taken to the actual retailer’s website after clicking the link on Fat Wallet. Once you make a purchase the retailer will pay Fat Wallet a commission and then Fat Wallet will share a portion of that commission with you in the form of a gift card or cash back.
Benefits: You’re getting a discounted price on a product in addition to getting cash or rewards back for each purchase.
Risks: Sometimes the lure of such good deals can result in you buying things that you really didn’t need. Not all items in the forums are revenue sharing deals, so read closely.
Woot and Direct to Consumer Deal Sites
Then there are sites that actually own the deals that they sell such as Woot. The way that they work is that they will buy a large lot of slow selling merchandise from a retailer and then offer those same items at below wholesale prices until the deal runs out. In business since the 90’s Woot is regarded as the pioneer of online deal websites. One of the things that makes them unique is that they only sell one deal a day and once a deal has sold out they stop selling until 12am the next day.
Benefits: If you are fortunate enough to make it in time to catch the deal you could save over 50% off of retail prices on sites such as Woot.
Risks: Oftentimes the products being sold on sites such as these are refurbished. Another thing that you should be aware of is that since these sites usually only offer each deal once, they typically don’t accept returns.
You’ve just seen how three different types of deal sites work along with the most popular sites for each category. Although these sites can be a bargain-hunter’s best friend it’s critical that you keep in mind the benefits and risks of each deal site before you jump in with both feet. And if the deal sites don’t appeal to you, don’t worry because you can still find great deals everyday at Rock Bottom T-Shirts on your favorite blank t-shirts and casual garments.