Discount Sites driving Business

I am a big fan of e-commerce and Indian e-commerce especially. Having worked in the web development field for more than a decade, and having seen multiple start-ups in the e-commerce and e-learning domains, I love the fact that this industry is still booming. What drives this is simple retail sales.

The sheer number of sites who have set up shop within the past two years is mind boggling. With large foreign multi-nationals also entering this market, the influx of money to the country has also strengthened the economy. Obviously with a limited number of consumers (although this is a significant number), and growing number of providers, the competition had to go up.

To battle competition, services and sites started providing deep discounts. Consumers started using these deep discounts to make spot purchases, which drew sales for different service providers.

So much was the power of these spot sales that multiple sites started aggregating these discount coupons and discount sites were born. Sites such as have spawned and boosted the e-commerce market in the country.

Now why should a consumer like you and me visit a discount site like Cuponation?

The answer is simple, getting a sweet deal on a product which you otherwise would have bought at a full price!

This is like the NET50 coupon of Dominos which you keep handy whenever you want to buy a pizza … have your cake and eat it too!

So why should a service provider look at registering on such sites … hmmm … to be honest, at a business level, you have to start thinking about the cost of sales of an individual customer versus the cost of a discount. If for a 1000 INR product, my cost of sales is INR 160, then I am more than happy to provide a 10% discount on that product since that would drive up my sales.

Another way of looking at this matter is if the contribution (revenues – costs) is positive and I am looking only at the revenues (in which case most likely I am VC funded ;-) ), then I would want a sales promotion like this to drive up my sales.

So it’s a win-win deal. The end customer is getting a good deal on a product he wants to buy, the seller is getting higher sales, and the intermediary (Cuponation in our case) is getting the commissions.

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