It seems now might be the time to buy a daily deal site. There are now 5 daily deal sites for sale on TradeMe.
There have certainly been many daily deal sites listed for sale on trademe over the years, but this is the first time there have been 5 for sale at the same time. What is happening in the market? Is it a good time to sell, or are owners getting tired? The histeria of the daily deal industry has certainly dropped. The boom is over, but daily deals are still very popular. Gone are the days when there was a new site launching each week. We are lucky to see a new site once a month.
As with all markets there is a build, a boom, consolidation then maturing of the market. We are in the consolidation phase right now. Consolidation involves sites closing down, or merging with others. We've had Daily Do purhcase rivals Groupy and Yazoom. Thats's 3 sites consolidating under one owner to save on office and staff costs. We've also had countless sites shut down, though this is usually due to bad management rather than any cyclical factors.
While the Group Buying model can only support a few players, the daily deal products area can support dozens, each with their own product offerings. Daily Deal sites don't need to dominate a market to be successful. Group buying sites take a 20% - 30% cut of sales (some sites take 50%), then pay their costs out of that. So their margins are a lot lower. Product sites have the potential to make 50% profit or more on sales, so they are a lot more stable in their earnings. Incidently, the 4 sites for sale are all product sites.
So do you want to buy a daily deal site? If the numbers look good, then we say go for it. You can take a look at each website for sale on TradeMe below