Living social

[Mattie]

Hi

Has anyone ever had any dealing with Living Social? i'm in the process of talking with them to run an offer on their website

[arko]

Hi Mattie. This is a similar firm to Groupon, although they are based in the US. Some friends have ads on there for the cardiff area. Not really sure what feedback they or closures of sales relative to their outlay. Only one thing I dont like about theses firms are the consistent spam mails you get if you dont unsubscribe..(sometimes when you havent even subscribed in the first place!... sometimes your details are passed on through twit and fancybook accounts!). I suppose you have to weigh your options... i.e. What will be my outlay to the sales ratio?

edit... added some neg reviews for the site...
http://www.bitterwallet.com/why-living- ... -all/37898
http://www.trustpilot.com/review/www.livingsocial.com

and one for Groupon...
http://www.trustpilot.co.uk/review/groupon.co.uk

[RogerC]

If it anything like Groupon I would avoid like the plague. There are reports of Groupon suppliers being inundated with orders far exceeding their capacity or what they thought they had signed up for. According to a report I read about a supplier in the USA who had not been paid the supplier threatened to cease honouring the 'sales' and was threatened with court action. As it is a US company you can be sure they will have 'tight' terms and conditions...........So while it 'might' seem like a good way to expand your market if it was me I would be very wary.

[Mattie]

Hi

Thanks for the info guys, i'm not sure if i want to go ahead with it now reading some of them reviews, i wouldn't like living social getting me a bad name if there was any problems.

Another thing that put me off was the fact the guy on the phone said you have to give minimum 50-60% off your normal price before they will except you, then they take 38% commission of the voucher sales.

[Mattie]

i've just received the draft agreement via email and i'm more shocked now than after the telephone conversation this morning.

you have to pay ---- 38% + VAT of the final value for total number of vouchers sold
-----1.5% + VAT card processing fee for every voucher sold

so on top of the minimum 50-60% discount you have to apply before they will accept you, how on earth do you make a good return.

[Andrew]

You need the right kind of product or service to get involved with these type of offers. If you get it right they can work very well but if you go in without doing your sums then they can ruin you. Most the people who have negative feedback are ones who thought about loads of sales without working out the viability and every single cost involved. Some people who get caught in the trap are those that think of it as a loss leader then have far bigger sales than expected. Loss leaders can work if you have the ability to follow up on the gathered database of new customers and get ongoing business but it can be a dangerous path.

Personally, if I was doing individual branded items I would find a way to have a go. Just do what Sportsdirect do and inflate the RRP early enough to account for the discounts and put the offer on a product that is easy to run. I would go for personalised graphic and text mugs rather than photos so it is easy to change. Have a dozen or so templates to choose from and I reckon I could happily run on an origianl RRP of £9.99 plus p+p. Easy £1.30 profit per mug. 2 people to comfortably make 300 mugs and process the orders a day. 1500 mugs per week so just short of £2k. If it gets busier it should become more cost effective not less. Easy to tweak up the margin with p+p adding an extra 20p etc or add in more expensive product option like the heat reveal or thermal mug and add a few more pound to rrp.

I would happily take 10,000 mugs ordered on the above and then a large new database to email with new special offers where I then keep all of the profit.

[Mattie]

the problem i have is they dont allow u to put price up compensate for offer (and this would effect existing customers)
you cannot alter p+p or timescale basically everything has to be the same as your website or store policy

they want me to sell a galaxy s3 rubber case for £5 which would just not work

id loose 38% +vat commission, 1.5%+vat card processing fee on every voucher sale, 90p postage, 74p cost price, £1 priniting cost
electricity and staff wages etc

[Andrew]

At £5 wouldn't the postage be on top though? I would put it at £1.50 p+p myself. £1 printing is way over the real cost I would have thought. You get 6 metal inserts per sheet. Electricity is always minimal as in a penny or 2 if running on volume. Haven't got time to work out exactly but not far off a workable scenario. If I had a website aimed at this market I would have a look further into it to see at what rrp it would work. Running on volume sales you can take much lower margins which many seem to be scared of.

Have they already seen your costs on your website then? £14.99 rrp for a personalised phone case would be fine in my book. 55% discount to £6.55 and with the 38% etc comms. I would happily print phonecases for the next year.

[Andrew]

Just had a look on their site and the first item I see is the halogen heater which is from £30 now down to £11. I bought 4 of these for the warehouse before Xmas for £10 each from Buyology. Inflating RRP's is standard practice. People love to think they have a bargain.

[Mattie]

No postage is not on top as on my website the postage is including in the price so they go off that, £1 printing cost was just a guess.

I sell them on my website for £11.99 and they said i have to give the 60% discount which takes it to the £5 mark, so factor in all the costs and time etc it wouln't be worth it, plus the negative feedback they have i don't want them bringing my reputation down that has took years to build.

i just thought about doing the offer as a few seem to be doing it, it's no big deal if i don't or do to be honest.