eBay have taken a leaf out of 1-day‘s playbook and have launched a Daily Deal on their UK website. The idea is simple – offer a compelling deal from the homepage, drive traffic to the site each day and sell the bargains by the thousands.
Meanwhile once you arrive at eBay.co.uk each day, why not check out the rest of the site – this should increase overall sales.
For once this is something that Trade Me could actually copy from eBay.
There are 3 key questions that remain to be resolved though.
- How do you select the products? They have to be real bargains from sellers that will deliver fast. It’s also an administrative burden to manually select those products, so it there some sort of auction each day for the space?
- How do you compensate Trade Me for the home page slot when the margins are so tiny? The home page slot could be sold for cash, but Trade Me does clip the ticket on the increase sales of the bargain anyway. Do you offer lower fees to get the prices even lower?
- How do you manage the fallout from smaller sellers who compete (poorly) with the products on offer. This is especially bad if the front page sellers get a cut on fees, but bad even if their fees are standard and they pay a home page placement fee. This could even cannibalize entire categories as members wait for the deal rather than shopping.
Lance Wiggs 