Do not purchase Groupon Clone or daily deal scripts that cost upfront (albeit one-time) hundreds to thousands of dollars, especially if you are new to the daily deal industry, or, worse, new to online marketing/selling generally. Doing so does not align the interest of the vendor with the interest of the daily deal website owner (you). Once one-time payment goes through, vendors have very, very little incentive (whether they do so is another question) to support and continually improve the product for their customers, because their revenue depends solely on the acquisition of new customers.

Anyone in the daily deal industry knows that starting a daily deal website from inception all the way to the generation of sustainable revenue takes time and effort. Vendors that collect a large payment upfront have very little interest in ensuring that the daily deal website’s entire business and technical processes are well-supported. Furthermore, there is no escape valve for 1) website owners who eventually realize that creating a daily deal website is hard work, way more than they were ready to invest, or 2) website owners who eventually discover a better/cheaper/more suitable solution out there. Human beings have the tendency to mull over sunk cost (e.g. “I've paid $1,000 for this script, I better use it and make it work.”).

Buying whole scripts and self-hosting it is like buying an 18-wheeler tractor to drive down to the neighborhood grocery store to buy a candy bar; a bicycle or cab ride would have been more than sufficient. Learning the ropes of the business does not need to be expensive.

I believe that people thinking of entering the daily deal industry should know of all alternatives when it comes to setting up a daily deal website. I am writing this article just to bring to your awareness the lesser known alternative of daily deal platforms, like ours, Zuupy CrowdDeals (http://www.zuupy.com), ChompOn, DailyDealWorks, etc. that either 1) charge a flat, low monthly fee, and/or 2) charge a percentage of your revenue, both of which are aligned with your interests. If we do not support your business well, you either 1) cancel your subscription and cut your losses or 2) make no revenue, lose no money, and thus the vendor gets paid nothing as well, respectively. Besides, we are reputed to be much easier to use; everything is already set up or at least easy to set up, and you will never need to worry about hosting and server issues.

I am even willing to promote our direct competitors above for credibility reasons; go ahead and compare us to the rest out there and decide for yourself a solution that is suitable for you. We who maintain daily deal platforms work extremely hard to provide a platform that is reliable, constantly upgraded, and capable of generating sustainable revenue for our customers, primarily because our financial interests are directly aligned with yours. We earn our revenue from our customers in the form of small monthly payments or commissions by delivering value day after day, not sell to you with vague promises until you are finally willing to part with hundreds of dollars, a one-time event.

I just felt the personal urge to share with anyone out there who needs to set up a daily deal website for the first time the possible risks of buying scripts that you may not even be sure works. All daily deal platforms, including ours, let you try out our software for free for 15 to 30 days, no strings attached. If I can say something on behalf of my company and our competitors, it is that we are sincere in building a long-term relationship with you and helping you grow, because our very livelihood depends on it.

Depending on the volume of sales that you target to make, the costs of starting and running a daily deal website can vary widely. Let us assume a small, growing daily deal website (low- to mid-6 figures in yearly turnover) for the purposes of this article.

1. Daily deal solutions and other software
The most obvious expense is the cost of building the daily deal website itself. There are three choices here: 1) build one from scratch, which costs a bomb (read: five figures) but is customizable to the bone, 2) get a daily deal script at a couple of thousand dollars and install it on your own servers, or, least overwhelmingly, 3) get started for a small monthly fee or a percentage of sales with one of the many daily deal platforms out there (including ours). The most recommended option for those starting out is obvious, so let us settle with that.
Cost: US$50-100 per month and/or 10-20% of sales

2. Subscriber acquisition
Subscribers are basically people whose email addresses constitute your mailing list. It is too naïve to assume that people will come to your website once it is set up without you needing to spoonfeed them your daily deals. There are two choices here: 1) acquire email addresses using traditional methods of online advertising (e.g. Google Adwords, Facebook Ads) and social media (Facebook and Twitter) by building a following and organically growing your list over time (the slow way), or 2) buy a list of email addresses (the fast way). If you go for the second option, beware.
Cost: US$300-500 per month

3. Email marketing software
Email marketing and deliverability is really an entire industry on its own. Your daily deal script or daily deal platform may come with an in-built emailing system, but, when you scale up to tens of thousands of subscribers, it is most prudent to start using email marketing software (MailChimp, SendGrid, PostmarkApp, etc.) that are built specifically to ensure that your mails are delivered on time and past the spam filters and that you can know what is going on (how many opens, how many unsubscribes, click-through rates, etc.).
Cost: US$50-100 per month

4. Design and creative expenses
Design and aesthetics are important and, most importantly, good design leads to credibility and increases trust and confidence (read: increased sales). One of the very first pieces of design work that you might need is a professional-looking logo. Then, you would need to create compelling graphics for other parts of your website (e.g. icons, banners, clip-art). If you are serious about differentiating your website, you would need custom-made videos for video marketing as well.
Cost: US$500-1,000 per month on average

5. Sales/Variable expenses
Even with a gorgeous website and a large mailing list, you will not get revenue unless you have sustainable deal flow, i.e. enough merchants who want to work with you to provide high-quality deals that are in demand. The cost of preparing for-merchant marketing collaterals should not be underestimated: business cards, brochures, data sheets, and agreements all cost money. After the deals are done, more expenses await you: the merchants’ revenue after your commission (which may include unredeemed vouchers), payment processing fees, refunds, etc.
Cost: US$5,000-10,000 on average

6. Administrative and miscellaneous expenses
Office supplies, utilities, and transportation all cost money. If you are required to incorporate your business for whatever reason, legal costs will also eat into your initial capital. Lawyers are notoriously expensive. So are PR firms. Do not forget other vital software which importance should not be discounted, such as analytics software (e.g. SEOMoz, HubSpot, ClickTale, Visual Website Optimizer). Also, let us not forget our obligation to pay our taxes dutifully as responsible citizens. And who exactly is paying for your living expenses, if you are working on your daily deal business as a full-time executive?
Cost: US$1,000-2,000 per month

There is obviously room for debate as to the range and magnitude of these costs, but the purpose of this article is not to provide an exact figure for budgeting as much as much as it is to provide a list of expense items to keep in mind when considering an entry into the highly-competitive daily deal industry. If there is any essential expense that I might have left out, do comment below and share your thoughts.

Greetings!

In the past few months, we have been busy revamping our product to make it do what you want it to do, and we have been encouraged by the positive response so far. We are personally writing you an update as to the new features that we have released recently to let you start and run a daily deal website with absolute ease:

1. Full white-labeling and domain mapping
We've heard you loud and clear -- your own domain name and branding are of absolute importance. We have now implemented full white-labelling, letting you link yourdomain.com to your website and yourdomain.com/account/ to your dashboard, as well as remove all "Zuupy" or "Zuupy CrowdDeals" references anywhere on your website with a simple upgrade to our $9.95/mth, pay-as-you-go Premium Plan.

2. Merchants management portal
Merchants (a.k.a. vendors) are the lifeblood of your daily deal business. We have created a merchants management portal for you to add/edit/remove merchants as well as an option for merchants themselves to suggest deals to you. We want to help you automate this aspect of your business as much as possible so that you can focus on selling and understanding your customers.

3. Locations management portal
Geographical targeting is important for both online and offline businesses, but even more so for the latter. You can now run deals and manage subscribers under a location-based system to ensure greater segmentation.

4. Subscribers and buyers management portal
A deal is worthless unless you can follow-up on them as leads and convert them into repeat buyers. Helping you do effective list-building is our foremost priority, second only to helping you sell and generate revenue.

5. Advanced customization, e.g. themes, CSS, Javascript
The worst thing that can happen when selling online is to have your website look generic and template-based; it looks, well, cheap. We have added powerful customization options that will help you transform the look and feel and branding of your website. You have full creative control now.

6. Facebook integration
Any online seller that does not take advantage of the 750-million strong social networking behemoth is probably losing out on business. We have integrated a variety of Facebook plug-ins (Like button, Like box, Comments) to better integrate your website with your Facebook community and vice-versa.

7. Multiple images per deal
Upload up to three images per deal now. A/B testing has shown that images do convert visitors into buyers; we are committed to helping you do just that.

My purpose of writing to you, apart from giving you a small update on the things that we have been working on, is to thank you for your undying support and willingness to engage with our team, our product, and our company. Your feedback has been invaluable and more than we can ask for. From the bottom of our hearts, we appreciate your time and effort.

Do enjoy summer (and, for our Aussie/NZ customers, the chilly winter)!

With thanks,

Alvin and Huy
Co-Founders,
Fezzl Pte Ltd
http://www.zuupy.com
8 Prince George's Park, Singapore 118407