Sounds strange doesn't it?
But what started out as a unique business model for some web based businesses
has now been adopted by more traditional companies as well.
Let's take a look at this interesting trend, generally known as "Deal a Day."
Even if it's not right for your business, you may find some bargains for
yourself along the way.
Although there are many variations on the Deal a Day theme, the common premise
is just that, a vendor offers a special price on a single item, usually for
24 hours. After that time, the "deal" is no longer available.
There are now over one hundred such sites with items ranging from computers,
electronics and software, to music and entertainment, sports and apparel,
home and kitchen among the most popular categories.
There are other variations on this theme as well such as longer time frames
for the sale, or progressively decreasing prices until the quantity available
is gone. Wait too long though, and the item could be sold out.
Web site Woot.com is generally
credited with starting this business model in July 2004 when owner Matt
Rutledge used it to reduce some excess inventory from his computer and electronics
distribution company. Since that time, they have attracted over 500,000 registered
members, all by word of mouth since they do no advertising.
Sales are now over $40 million a year and the products they sell include
not only those from well known companies looking to reduce their own inventory,
but also those companies looking to generate "buzz" for
a new product launch.
A lot of Woot's success comes from the sense of community they have created.
Not only is it entertaining with a generally irreverent attitude, but their
discussion forum averages over 250 entries per item where people will weigh
in with comments and experiences with the listed item, both good and bad.
Woot themselves have no qualms about identifying what they feel may
be shortcomings of the item up for sale.
Definitely one of their most interesting aspects is their periodic sale
of an item known as a "bag of crap." A portion of Woot's own description
for this item is as follows:
"Take it from us: you don't want this junk. We sure as hell don't, and we've
seen it. You'd be better off with just about anything from a 99-cent value
menu near you."
For $1 and the standard $5 shipping, Woot gets
to relieve their warehouse of all the leftover and returned inventory along
with some really oddball items that they must pick up along the way. However,
while most purchasers delight in comparing the "crap" they have
received, some are rewarded with legitimately valuable items and even the
occasional 61" plasma
TV to keep things interesting.
While Woot only sells one item per day, many larger and established companies
have been getting on the bandwagon. Established web vendors such as amazon.com,
overstock.com and buy.com all have added a special deal of the day aspect
to their regular items. But they are not alone. Even brick and mortar vendors
like Linens 'n Things and REI now offer Deal a Day offers on their web sites.
There are even Web sites devoted to helping people keep track of all of the
available deals. One of the better ones is www.DODTracker.com.
Take a look and see what bargains you may find.
More importantly, take some inspiration from a company that found a new
way to dispose of some excess inventory, and created a whole new business
model in the process.
