How to sell on Groupon
Simple strategies for becoming a successful Groupon.co.uk merchant.
Groupon is an online marketplace that connects merchants with bargain-hunting buyers. You can use the platform to sell discounted products, experiences and activities to buyers, who use their collective bargaining power to access the best deals.
Launched in Australia in 2011, Groupon has helped more than 16,000 businesses attract new customers and market their business. However, there’s plenty you should know before offering a deal or selling products through Groupon, so keep reading to find out how to get started.
What's in this guide?
- How do I decide what to sell on Groupon?
- How much does it cost to sell on Groupon?
- Is selling on Groupon worth it?
- How do I start selling on Groupon?
- How to price your items
- What types of payment does Groupon accept?
- How to get paid by international buyers
- How to organise shipping
- How do I market my Groupon products?
- What to watch out for with Groupon
- Frequently asked questions
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. This option allows you to offer discounted services and experiences to local shoppers. Examples include cheap entry to tourist attractions, discounted meals at restaurants and cafes, and savings on things like car servicing, massages and gym classes.
- Shopping. You can sell discounted products on Groupon across a wide range of categories. However, there’s no international shipping available, so you can only use Groupon to sell goods to UK shoppers. Product categories include:
- Auto & Home Appliances
- Baby & Kids
- Grocery, Alcohol & Tobacco
- Health & Beauty
- Home & Garden
- Jewellery & Watches
- Men’s & Women’s Fashion
- Pet Supplies
- Sports & Outdoors
- Travel campaigns. Accommodation and travel services providers run Groupon campaigns to offer discounted rooms, encourage guests to stay longer and sell holiday package deals.
- Tickets. Event organisers and promoters can also use the platform to promote and sell discounted tickets to festivals, comedy shows, live music and more.
How much does it cost to sell on Groupon?
There is no upfront cost to sell on Groupon. However, it does take a cut from each sale you make. This is known as a marketing fee, but it’s not charged at a fixed rate.
Instead, Groupon says there is a range of factors that influence the marketing fee that applies to your offer. For example, if you offer a Local Deal through the platform, the fee varies based on your industry and the level of consumer demand for your deal.
There are several reports online of up to 50% commission being deducted from the sale price, but there’s no transparent fee information on the Groupon UK website. If you want to find out exactly how much it costs to sell on Groupon, contact Groupon directly to discuss the specifics of your campaign.
Is selling on Groupon worth it?
Offering deals on Groupon could help your business attract potential customers and increase brand awareness.
However, just as with any other business venture, selling online on Groupon comes with a certain level of risk attached. Groupon fees can impact your bottom line, you can’t sell physical products to international buyers, and there’s no guarantee that running campaigns will be a successful long-term exercise.
That said, there are a few simple things you can do to improve your chances of success, such as:
- Take your time. Don’t just put together a Groupon deal on the spur of the moment. Take the time to calculate all of the costs involved, including Groupon’s fees, to create a deal that offers benefits for you and your customers.
- Choose the right product to discount. To avoid losing money on your Groupon offer, discount a product that has a high profit margin.
- Think outside the box. Instead of thinking of selling on Groupon as a money-making venture, you may want to treat it as a marketing campaign. If you adopt this approach, you’ll need to consider whether the cost of the campaign is worth it based on the number of new customers you may attract.
- 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.
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 price your items
There are a few factors to consider when pricing a Groupon deal:
- What represents a good deal to buyers? Research similar deals on Groupon and other online deals sites to get a feel for the type of discounts being offered. Which deals are the most popular and why?
- Groupon’s fee. Make sure you’re aware what percentage of each sale you make will be paid to Groupon as a commission.
- Affordability. Calculate how much it costs you to source, manufacture or provide your deal to customers. When you include Groupon’s fees, at what level would you need to price your deal in order to break even?
Considering these factors should help you settle on a price point that suits you and your customers.
What types of payment does Groupon accept?
Buyers can order Groupons using two payment methods:
- Credit/debit card (only cards registered in the UK)
How to get paid by international buyers
Groupon.co.uk doesn’t accept overseas credit cards and debit cards, so international buyers will need to submit payment through PayPal. You’ll then need to find a cost-effective way to convert the foreign currency you receive into pound sterling.
You could do this through PayPal. However, when you want to withdraw foreign currency to your UK bank account, PayPal converts the funds into GBP at a rate 2.5% above its base exchange rate.
You can get a much better exchange rate by signing up for an online seller account. This is a multi-currency account that allows you to receive payments in several foreign currencies, and then convert funds into GBP at an attractive rate.
Check out the table below to find out more about the features of a range of online seller accounts.
How to organise shipping
When you sell products through Groupon, it’s up to you to take care of shipping items to customers. You can send items via the Post Office or using a courier service, so it’s worth shopping around to compare shipping costs and delivery timeframes. Most items sold on Groupon also allow customers to track the progress of shipping, so make sure you can provide this feature to buyers.
However, products sold on Groupon.co.uk can only be shipped within the UK, so you won’t need to worry about choosing an international shipping method.
It’s also worth noting that if you have a physical storefront, you might like to offer in-store pick-up as an option to customers. This allows you to increase the number of people visiting your store, develop a relationship with buyers and potentially upsell them to other products.
How do I market my Groupon products?
As Groupon is essentially a marketing platform for businesses, it takes care of marketing your products for you. Groupon uses a “relevance engine” to promote your products to customers who are more likely to buy. Deals are marketed:
- On the Groupon website
- In email newsletters
- Via push notifications in the Groupon mobile app
- On affiliate marketing sites
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:
- Limited upfront fee information. Groupon doesn’t provide a whole lot of information upfront about how much it will cost you to offer a deal through the platform. The marketing fee you pay varies based on your industry, target market and consumer demand, so you’ll need to contact Groupon directly to get a detailed fee breakdown for your campaign.
- Profit margins. Groupon deals commonly allow shoppers to get 50% or more off products and services. When you offer a hugely discounted deal and Groupon then takes its cut, there’s a risk of running a campaign at a loss.
- Attracting bargain hunters instead of repeat customers. Groupon deals can attract deal seekers keen to score a cheap deal. So, even if your campaign achieves plenty of sales, it may not be successful at generating repeat business.
- Surge in sales. A successful Groupon campaign can drive a big short-term sales boost. You’ll need to be certain your business is prepared to cope with the potential increased demand before offering a deal.
- Brand impact. Consider whether offering a dirt-cheap deal could have a negative impact on the brand image you’re trying to build – once people have bought your product or service at half its normal price, how likely are they to come back again in the future and pay full price? You also run the risk of annoying your existing customers who miss out on the big savings being offered to new business.
- UK only. When you sell products on Groupon, you can only ship them within the UK. This means you can’t use the platform to target an audience of buyers from around the world.
Frequently asked questions
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