Lately it seems like my inbox is filled with all of the daily deals websites I’ve signed up for. Groupon, Living Social, Housewares Deals and more.
I’ve purchased a KitchenAid set from Housewares Deals, Yoga and Food from Groupon, and Fitness Camps from Living Social. They all seem like ridiculous deals and I know I’ve saved a ton of cash by taking advantage of them.
I can’t help but wonder, how are these companies making money? I read an article a few months back stating that 40% of Groupon merchants would not participate again.
The author of the study, Utpal Dholakia, states: “Because the Groupon customer base is made up of deal-seekers and bargain shoppers, they might not tip as well as an average customer or be willing to purchase beyond the deal.”
I agree with this, even when I just look at the daily deals I’ve purchased. I want the deal, but I likely won’t continue the fitness camp beyond the included time frame, for example.
How do you feel about this? I’d love to hear from both business owners and consumers!