Deal of the day (ecommerce)

Deal-of-the-day (also called daily deal or flash sales or one deal a day) is an ecommerce business model in which a website offers a single product for sale for a period of 24 to 36 hours. Potential customers register as members of the deal-a-day websites and receive online offers and invitations by email or social networks.

As of 2011^[update], deal-of-the-day sites have continued to grow in popularity, although new concerns have arisen over the longevity of the concept and the financial viability of one-day deals for small businesses.

The deal-of-the-day concept gained popularity with the launching of Woot.com in July 2004, although Woot itself was a modified version of earlier dot-com bubble sites such as uBid. By late 2006, the deal-of-the-day industry had greatly expanded to over 100 deal-a-day sites. In November 2008, Groupon entered the market and became the second fastest online company to reach a billion-dollar valuation.

Other online businesses, including Facebook, and Google tested their own daily deal sites, withdrawing them after they proved unsuccessful. However, the rise of social networks, such as Facebook and Myspace, has accelerated the growth of daily deals sites, allowing popular deals to spread virally.

The deal-of-the-day business model works by allowing retailers to market discounted services or products directly to the customers of the deal company, who receives a portion of the retailer's profit. This allows retailers to build brand loyalty and quickly sell surplus inventory.

The majority of deal-of-the-day sites work directly with local businesses and online retailers to develop deals significantly discounted compared to recommended retail prices. Using a group buying formula, a minimum and maximum number of deals are made available. Typically, deal of the day sites segment merchandise by specific designer sales. Deals are typically only offered for 24 hours, although daily deal websites are increasingly offering alternative, longer deal buying periods to increase sales and allow multiple deals to run in a single location concurrently.

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