Groupon is a discount and promotions aggregator that helps users save money and businesses increase sales. The service is used by tens of millions of people around the world who conclude 400,000 transactions every day, thanks to which the company will receive $ 3 billion in annual revenue. In our article, you will learn how this online service works and how you can create a website like Groupon yourself by cloning its functionality and partially design.
Niche and target audience
There are more than 500 Groupon clones worldwide today. Popular ones include Dealnews, Woot, Brad's Deals, TechBargains, Slickdeals, FatWallet, Groupon, Coupon Clippers, RetailMeNot, LivingSocial (acquired by Groupon) and many others. There are by an order more similar niche projects.
Due to this level of competition, it is unwise to launch a site like Groupon that will work with all categories of goods and services, as this would require a lot of investment in development and marketing. It's easier to launch a niche project like Holidayers.com (vacations and travel), TravelCoupons (same day tours) or Wpbeginner.com/deals (WordPress and hosting).
How to stand out from services like Groupon:
- Narrow your niche. Various goods, restaurants, travel, beauty services and entertainment are the most popular categories. However, people are looking not for something as general, but for some specific things, thanks to which you can further diversify the audience. For example, discounts on video games, pet supplies, sports equipment, books, or motorcycles.
- Focus on local business. Aggregators like Groupon can span entire countries, but they cannot be equally strong in all regions and cities. Most of the discounts, promotions and sales of local businesses pass by such sites, unless they are focused on a specific city, which allows you to establish closer contacts with the business.
- Provide more value than others. Better terms and unique features can help you to stand out from the competitors. It will be great if you can implement an automatic check for the availability of promotions and discounts for a specific product on Amazon, Flippa or another marketplace.
Business model for the Groupon clone
How online discount aggregators like Groupon work. Source
At the time of its launch, Groupon helped users unite into one group in order to get a coupon for participation in promotions and discounts (hence the name formed by the combination of the words "group" and "coupon"), which began to operate only when there were enough people willing. Over time, the requirements for grouping people have essentially disappeared, and now Groupon is a website that publishes news
about discounts, sales, promotions, contests and giveaways.
The basic business model of the service is simple: the site publishes trade offers from suppliers and receives a 50% commission on each trade. Any seller of goods and services can become a supplier. The service is free for both parties.
When creating your site like Groupon, you can use this same business model, but not necessarily. Online aggregators of discounts and promotions can work according to a different algorithm. Here are examples of the most popular approaches.
. On such sites, users can find coupons, which are usually distributed in print form through newspapers, magazines or advertising brochures. The same coupons can be distributed over the Internet. The user finds them, prints them out and goes to the store. Such sites earn, as a rule, on a commission from each transaction (10-50%). Here are some examples of such projects: RetailMeNot
, Coupon Clippers
On Coupons you can find coupons for purchases in offline stores
One day offers
. Hot trade offers are published on such sites, as a rule, with very large discounts - 50% or more. And such offers usually last for one day, which encourages buyers to act here and now. These projects earn on commissions from each transaction (30-50%). This business model is used by Groupon
LivingSocial has some very tempting hot deals
. On such sites, they publish links to the most interesting and big discounts, promotions, sales and giveaways. At the same time, the service usually also makes comparisons and reviews of goods, services and stores, thus helping its users to make the right choice. This business model is used by Tom's Guide
, Read Aloud Revival
and other sites like Groupon.
Tom's Guide will not only help you save money, but will tell you about the product or service
. This model is very similar to traditional coupon sites, except that they don't need to be printed. The user just needs to upload the coupon from the website to the loyalty card of a restaurant, gas station, supermarket or other seller. Wait a couple of minutes for the system to activate the coupon, and you can go shopping. An example of such a site is Cellfire
On Cellfire, coupons need to be loaded into store loyalty cards
. Users can buy electronic or physical gift cards (delivered by mail) at a discount and use them for their intended purpose or gift to someone. Some gift cards can be purchased and simply printed. You can find such offers on Cardpool
and GiftCard Granny
GiftCard Granny has discounted gift cards for both offline and online stores
ou can also create a site like Groupon where discounts can be won in the lottery. The giveaway can be held here and now, or it will be something like "like, subscribe, share the page and you will get a chance to win a $ 500 gift card". You can participate in such giveaways at Online-Sweepstakes
Contestgirl rewards can be pretty big
. In recent years, cashback discounts have become very popular, as well as sites that collect all cashback offers in one place. Such sites actually work as intermediaries: they take money from the seller and redirect it to the buyer, except their commission. The amount of the commission depends on the intermediary. Someone takes 20% of the cashback, and someone - all 90%. Notable examples of such platforms are Ebates
The average cashback on Mr.Rebates and other similar sites is 2-7%
. Nobody prohibits the use of several ways of organizing a business, creating a website like Groupon. For example, like GiftCard Granny, where you can buy a card with a traditional discount or cashback. Another example is the Pg Good Everyday
service, where a discount is issued as a reward for good actions (charity, volunteering) or useful knowledge (how to save water, etc.).
Pg Good Everyday rewards for good deeds
Monetizing the Groupon discount aggregator
Most of Groupon's revenue comes from coupon sales and loyalty card deals that connect consumers to local businesses. In addition, the company also makes money by selling products directly to consumers. Collectively, these items generate $ 2-2.5 billion in revenue.
Other directions are also important, but this is additional income:
- Groupon Select subscription ($ 5 / month), which saves an additional 25% on local business visits and 10% on travel and events. In addition, a subscription gives you access to exclusive offers and programs.
- Contextual advertising. Almost every site has paid ads for various brands and third-party services, and Groupon is no exception. It has a lot of ads from discount providers and third-party services
- Other services. The platform can offer businesses and buyers the tools that make the buying process easier, faster, and more enjoyable. For example, Groupon invites suppliers to use payment services Groupon Payments, Groupon Scheduler and others.
Basic and additional functions
By its functionality, Groupon is very similar to a regular online store
, but it has a greater emphasis on discounts and promotions. Groupon also implements the ability to link a site user to a physical or electronic loyalty card of some local business, in order to track transactions between them and take a percentage of each transaction.
Otherwise, site features like Groupon can be pretty standard.