In February 2020, Groupon announced that it’s closing down its Goods platform. By the end of Q3 — September 2020 — the site will no longer sell physical items. Instead it will focus on peddling local deals, services and experiences, according to its Q4 letter to stockholders.
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How to sell on Groupon
Consider promoting your business on this platform, but beware of its fees.
Launched in Chicago in 2008, Groupon is an online marketplace that’s helped over a million businesses attract new customers with special deals and discounts.
Groupon is available in 15 countries and all over the US. But before you decide to launch a campaign to sell experiences or services, consider the cost.
What's in this guide?
How much does it cost to sell on Groupon?
There is no upfront cost to sell on Groupon. It’s free to set up an account and create listings. However, Groupon takes a cut from each sale, known as a marketing fee. It’s not a fixed rate, but instead fluctuates by industry, market and consumer demand.
Groupon’s lack of clarity on its fees is worrisome. Third-party comparison sites cite its marketing fee at a whopping 50%, but there’s no information on Groupon’s website to confirm this. Unfortunately, the only way to find out exactly how much it costs to sell on Groupon is to contact Groupon directly and set up a campaign.
How do I start selling on Groupon?
You can register for an account and start selling on Groupon by completing the following steps.
How to integrate your existing store with Groupon
Already running an online store? Integrate your Groupon account with an existing e-commerce store on Shopify, Magento, WooCommerce, Volusion, and many more.
Check your e-commerce platform’s available plugins and integrations to connect to Groupon for cross-channel selling.
Also consider an e-commerce store if you’re looking for an alternative to Groupon Goods, since services like Shopify can help you sell via Rakuten, Amazon, eBay and other third party marketplaces.
Shopify is a hosted e-commerce platform that specializes in digital stores while also offering in-person point-of-sale (POS) systems, shopping cart software and an expansive library of third-party app integrations. Because it’s fully managed by Shopify, you don’t need a server, IT team or dev experience to get started. And while it caters to online merchants, its in-person POS systems provide processing options for brick-and-mortar businesses.
- Integrated marketing tools
- Sell through eBay, Amazon, Facebook, Google Shopping and more
- Add products to any existing blog or website
- Integrated shipping with exclusive rates on international orders
Compare e-commerce platforms
How do I decide what to sell on Groupon?
Groupon is best known as a daily deals platform where buyers can access discounted activities and attractions in their local city. However, it’s possible to provide discounted offers across several categories:
- Local Deals. Offer discounted services and experiences to local shoppers including cheap entry to tourist attractions, fixed-price meals at restaurants, and discounts on services like massages and gym classes.
- Getaways. Accommodation and travel service providers can run Groupon campaigns to offer discounted room rates and sell holiday package deals.
- Live Events. Event organizers and promoters can use the platform to promote and sell discounted tickets to festivals, comedy shows, live music and more.
Check out these Groupon promo codes to find out more about some of the deals offered on the platform.
How do I price my items
There are several factors to consider when pricing a Groupon deal:
- Research similar discounts. Check out Groupon and other online deals sites to get a feel for the type of discounts out there. Choose a discount that you can afford and people will buy.
- Fees. Talk to a Groupon consultant for clarification about fees and how they work. Ask about the percentage they take as commission.
- Affordability. Calculate how much it costs you to offer a deal to customers, including manufacturing, operating and shipping costs.
What types of payment does Groupon accept?
Buyers can purchase Groupons using three payment methods:
- Credit card
- Debit card
- PayPal
How to get paid by international buyers
To get paid by international buyers, you’ll need to find the best and cheapest way to convert your money to US dollars. Work with international bank account or use a money transfer service, like PayPal.
With either option, compare exchange rates and account fees before you apply.
How do I market my Groupon products?
As Groupon is essentially a marketing platform for businesses, it takes care of marketing your services and experiences for you. Groupon uses an internal relevance engine to promote your products to customers who are more likely to buy. Daily deals are marketed:
- On the Groupon website
- In email newsletters
- On affiliate marketing sites
- Through push notifications in the Groupon mobile app
Groupon also uses promo codes, dynamic pricing and other incentives to promote offers to consumers. In some cases, you may need to pay to cover the cost of these promotions.
What to watch out for with Groupon
Keep an eye out for these potential problems if you’re thinking of selling on Groupon:
- Not upfront about fees. Groupon doesn’t provide any information about its fees, so contact Groupon directly to get a detailed fee breakdown for your campaign.
- Slim profit margins. Groupon deals commonly allow shoppers to get 50% or more off products and services. Factor in Groupon’s cut into an already hugely discounted deal and you run the risk of running a campaign at a loss.
- Attracts bargain hunters. Groupon deals may attract deal-seekers looking for nothing more than a cheap service or experience. Even if your campaign nets plenty of sales, you may not generate much repeat business.
- Brand impact. Consider whether offering a cheap deal will negatively impact your brand image. Once people have purchased your service or experience at half its normal price, how likely are they to return and pay full price?
Is selling on Groupon worth it?
Offering deals on Groupon could help your business attract potential customers and increase brand awareness. But selling on Groupon has its risks. Groupon fees can impact your bottom line and there’s no guarantee that running campaigns will be a successful long-term exercise.
That said, there are a few things you can do to improve your chances of success:
- Take your time. Calculate the costs involved, including Groupon’s fees, to create a deal that offers a benefit to you and your customers.
- Choose the right product. To avoid losing money on your Groupon offer, discount a service or experience with a high-profit margin.
- Think outside the box. Instead of viewing Groupon as a money-making venture, you may want to treat it as a marketing campaign. How much are you willing to spend on a short-term marketing campaign?
- Be prepared. If your Groupon deal sells well, you need to be prepared for a surge in orders. Make sure you have adequate stock and sufficient staff on hand to deal with the increased demand.
Bottom line
Groupon can help you gain exposure and market your business, but be on the lookout for high marketing fees. You’ll also need to be ready to follow up with new customers to encourage repeat business. And if you want to sell on multiple platforms, you may want to consider setting up your own shop with an e-commerce platform.
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