Daily deal sites hold promise for smaller businesses because they help them gain access to a wider market and generate income through higher volumes at affordable prices. One in the latest website services available, daily sites like ‘Groupon’, Living Social, and local ones like ‘TryItLocal’, help small enterprises reach their target clientele that is searching on the internet for his or her specific products. These sites offer heavy discounts on selected products to lure a lot more customers. The promise of more business, getting noticed from the masses, higher profits, and wider market access pushes small businesses towards such sites. However, this approach to sales success is fraught with pitfalls, five of which are listed below:
1. A high amount of the sale price needs to be shared
Daily deal sites like ‘Groupon’ expect 50% with the final sale price as service charges. This is not a small amount and also the business only gets a lot that will barely cover its costs, with little scope left to make profits. The hype about making financial resources are not delivered.
2. Hefty discounts reduce the company image
A discount dilutes the emblem price of a product also it loses its appeal inside the customer’s eyes. Initially, there may be a spur in sales, but this will not be sustained since people’s perception is these products usually are not superior. Small businesses have to make a brand image, not see it slashed in their nascent stages.