Coupon Crazy Websites?

[olimits7]

Hi,

How do these websites that offer daily/weekly/etc discount coupons for 20% - 40% off the product price make a profit?

I'm guessing that most websites mark-up their product prices by 10%-20% to make a profit, but if they keep handing out all these discount coupons it's basically bringing them back to break even or even a loss?

Unless, they over mark-up their product prices by 40% - 50% this way even if a discount coupon is used they can still make a profit?

Thank you,

olimits7

[jecasc]

So what would you recommend no box to enter coupon codes

We give out coupon codes if something goes wrong with a delivery. Only that we do not call it coupon but voucher. And guess where you can redeem them? In the box "gift voucher" during the checkout process. The same box where you can redeem gift vouchers you buy at our website. Well actually you can't buy gift vouchers at our website, at least not yet - but this way nobody ever asked for a coupon code.

[jsinger]

A few years ago I started a thread asking whether cart coupon boxes discourage orders from the huge majority of shoppers without a coupon. The general gut feeling was that they do and that coupon boxes ought be removed whenever a coupon wasn't active.

Since then, I've read research supporting the idea that coupon boxes are indeed detrimental to sales. Of course, a SENSIBLE coupon promo may more than offset that detriment.

Seems most shopping carts I see nowadays have permanent coupon boxes. The box is visible even when no coupon is active. Plus many sites have coupons of various flavors going year-round, as we have lately.

The idea of disguising coupons under another name, say voucher or gift certificate, is worth considering.

[Luxoria]

I am with jsinger on this one. When I am online shopping and I see the coupon box first thing I do is open google and search away for a coupon code.

I have not opened my store yet, but I am thinking about adding a 10% coupon code to those coupon search sites like retailmenot and slickdeals for the sake of traffic generation and SEO. The only thing is I don't have a way to track if the sell would be influenced by the coupon site or if the buyer searched for the coupon, like me, after they see the box.

Now that I read this thread I am reconsidering even having the coupon box all together. 10% off is no biggie if it generate sales.

[aspdaddy]

They just factor it into the advertising budget. For every voucher user there must be many more who pay full price. There are loads of people I know who have never even heard of , or cant be bothered with clearing cookies and pay full price for online purchases. And then there are the few who repeatadly have free mobile phones, breakdown cover etc.

Disneyland is a good example, plenty of vouchers in the newspapers, still in business :)

[burgi]

Disneyland is not really a good example because their business has mostly fixed costs, so the variable costs that need to be covered with each visit are low. Therefore, they can provide these great coupon offers.
Most retailers however have mainly variable costs, so giving a big discount is often not profitable.

[enigma1]

How do these websites that offer daily/weekly/etc discount coupons for 20% - 40% off the product price make a profit?

I've seen lots of strange things to the extend I don't pay attention to coupons. There are sites which specifically offer coupons to generate traffic or sell them directly. Coupons which they could be taken from newspapers, magazines or other promotion materials.

At times there is marketing potential depending on the coupon form (eg: when directly obtained), but I would invest marketing the business by other means.