How to Start a Coupon WebsiteOnline Business Ideas Tuesday, February 15th, 2011
Everyone looks for saving money on purchases and, thus, it makes perfect sense to start a coupon website. A coupons website site allows businesses to list their discount and offer coupons that buyers can use while purchasing products and services.
Why Start a Coupon Site
Coupons are an effective tool for businesses to promote their products and customers also look for discounts on products. A coupon site acts as a medium for businesses and customers allowing businesses to offer coupons and providing customers with a listing of available coupons. Traditionally, businesses have been distributing coupons through other mediums such as newspapers, magazines etc. A coupon site provides another, but, much bigger and cost effective, medium to businesses to distribute their coupons to customers. With more and more business embracing Internet as part of their business, starting a coupon site can be a great business idea.
Requirements for Starting a Coupon Site
- Website with online payment processing capabilities
- Business-to-Business (B2B) marketing skills
- Computer with Internet connectivity
Coupon Site Business Operations
To start and run a coupon site you will need to hire a web design and development firm to build the website that will coupon listings. You can also develop website on your own if you have these skills. The listing feature itself can be developed in two ways; you can either add coupons to the site on behalf of businesses or allows businesses to add coupons on their own. Ideally you should have a website with the ability for businesses to create and add coupons themselves using a secure account that limits access to them.
Another factor to consider while building website is payment processing. You will need to decide how you will be collecting payments. If you want to collect payments online then the website will need to have an integrated payment gateway to process payments.
You will also need to decide, as part of the website development, the way in which the coupons will be delivered to the user and how they will be used. A coupon can be an image that the customer will be able to print and use for offline purchases or a simple alphanumeric coupon code that the customer will be able to use while purchasing products online. You may develop a website that can work for both types of coupons or either of them.
Once you have developed the website, your main task will be to contact businesses for listing their coupons on the site and promoting the site amongst users. Depending on your skills and availability, you can choose to contact businesses yourself or hire someone for marketing.
It is important to understand the geographical limitations of coupons business. While having a website will allow you access to advertisers from any part of the world, it will be difficult to manage business relationship with advertisers from other countries for a small set up. Also, the differences in currencies and pricing strategies, it is better for a coupon site to focus on a single region or country.
The operational effectiveness and success of a coupon website will be measured on:
- Site uptime – Make sure that you hire a good web hosting service with guaranteed uptime.
- Number of valid new coupons – Users will be looking for latest and valid coupons that they can use.
- Number of users in the targeted market – Businesses will want more and more users from their target market segment to promote their coupons.
The marketing plan for a coupon site needs to have two approaches; one to target the advertisers and one to attract the users.
For marketing the site to advertisers, you will need to create an offline marketing plan which will include calling the advertisers and personal meetings with marketing teams to explain the features of your website and potential. Apart from that you can also use email marketing to promote your site amongst advertisers.
To market your website to the customers who will use coupons:
- Promote the website on search engines through Pay-Per-Click ads for keywords related to the coupons available on the website.
- Create an opt-in email marketing system by asking users to subscribe to the mailing list for being notified about the latest coupons on the site.
- Develop viral marketing features in your website so that users can share your coupons amongst their friends on social networks such as Facebook or forward the coupons through email.
- Create a long-term search engine optimization plan that will bring free traffic from search engines.
Upfront Cost to Start
The startup cost will mainly comprise of website design and development fee which will depend on the complexity of the website that you decide to build. Apart from that their will be regular operational expenses such as website hosting fee and expenses for promoting the site to the users and advertisers.
Business Model & Pricing
There can be several business models for operating a coupons website:
- Pay Per Listing – In this model the advertiser will pay a set fee every time a new coupon is added to the site.
- Pay Per Download – The advertiser will pay each time a coupons is downloaded. For coupons that are not image based, the advertise will pay each time the user clicks the listing to reveal the coupon code.
- Monthly or annual subscription plans for businesses – The businesses pays a monthly or annual subscription fee and, depending on the plan, gets the ability to add a fixed number of, or unlimited, coupons and coupon codes.
- Free – The site can also be made free for businesses and users both and the revenue can be generated by displaying ads. This will, however, require a significant traffic to be able to generate a decent revenue from the site.
- Monthly or annual subscription plans for users – This is a very ambitious model and may not work for everyone; however, if you can manage to get useful and exclusive coupons that are not available anywhere else, you can ask the members to subscribe for access to those coupons.
You will need to decide the pricing on the basis of fixed and operational cost of your business and external factors such as the cost for promoting a coupon for a business through alternative mediums.
Insurance & Regulatory Requirements
You may have to check with your attorney about the type of products that can be legally promoted through coupons as there can be restrictions on some products and services. Apart from that there are no specific insurance or regulatory requirements to start a coupon site.
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