What is Groupon

You may be quite familiar with hearing about Groupon, or the concept of the daily deals. So, what is this Groupon we constantly hear about, what can it do for you and how does it offer such amazing deals?

The Start

What is Groupon - Groupon is a relatively new concept and began in Chicago in 2008. However, spread to the UK and pretty much worldwide in the following years. So much so that there is now a Groupon for most cities and for large city's individual parts of these cities.

You may also have noticed there are also a number of other daily deal's sites on offer. The likes of KGB Deals, Living Social and City deals, as well as a number of smaller sites are very common. These all came to prevalence after Groupon, thanks, mainly to its popularity, though do offer similar deals.

What does it do?

Well, Groupon, which now includes Citydeal, offer discounts of up to 70 per cent on the price of everything from beauty treatments to clothing and other items. These deals mean that as a consumer you can save a substantial amount of money on items, you would not usually be able to afford.

The significant percentages of money saved by consumers has seen the popularity of these sites just mushroom. Daily deal sites have become popular for one obvious reason - they offer savings on luxury pastimes in a time of recession.

How do they do it?

Groupon and other daily deal sites contact retailers, or are contacted by retailers. These retailers are willing to offer them daily deals for a significantly reduced percentage for a number of reasons.

Advertising

Groupon has hundreds of thousands, if not millions of people each day receiving its daily deals newsletters and for many people it's one of the first things they do in the morning. This means it has a huge advertisement base, even if people don't purchase items, you get the benefits of advertising.

Business

Businesses generally sell their goods at cost, or slightly above the price. In the case of things such as treatments that is a substantial figure that even at a reduced cost is covered. Even with clothing where there is a 70 per cent mark up this is the case.

Business gives Groupon, or other daily deal's sites a percentage of the income they receive from these sales, though there is another factor, they depend on for making money - return sales.

Return Business

By offering a quality service these businesses hope to drum up a good opinion of their business and then receive return business at full price from happy customers. This return business is where they make their money and can ensure that their business become more successful.

For the customer, this is also a positive as it means that the business will perform to a very high standard as this is their chance to impress. This will then mean an impressed customer will be happy enough to return and then pay for the repeat business. Groupon will obviously have exited at this stage; however, it is not uncommon for business to decide on using the daily deal's sites on a regular basis due to the positive effects of the first effort.

In the case of many companies, they offer services that require return business, or will get customers interested in a long-term basis. They may also do things and then suggest from their expert advice how you can get a better service, or where problems lie with the existing scenario. This for the customer still means a good deal as they get a cheaper deal, while also are happy having received a positive service.

Daily deals offer both business and customer a very positive experience, while also mean that the value and competition in the daily deal's sector is stronger and stronger. This of course means better long-term value.

ABOUT THE AUTHOR:

The Article is written by Cormac Reynolds at www.D3ALS.us providing and aggregation of Daily Deals, Hotel Deals, Holiday Deals, Spa Deals including many for Groupon. Visit http://www.D3ALS.us for more information on www.D3ALS.us Products & Services. Copyright information. This article is free for reproduction but must be reproduced in its entirety, including live links & this copyright statement must be included. Visit www.D3ALS.us for all your daily deals in one place and in one email.