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Daily Deal Sites Help Small Businesses Score Savings

October 3, 2013
URL: http://www.entrepreneur.com/article/228703

When it comes to scoring discounts on business-related purchases, several group-buying websites are proving that there's power in numbers.

Similar to consumer-deal sites like Groupon and LivingSocial, these business-to-business outfits leverage their large subscriber networks to broker deals with vendors and take a cut of the sales. While some of these sites specialize in segments like office supplies or tech solutions, all offer free membership, frequent deal alerts and significant savings of anywhere between 10 to 80 percent off the retail price -- making the little-known sites hard to keep ignoring.

"We've had companies tell us they're saving anywhere from $20,000 to $30,000 a year on our site," says George Favvas, co-founder and CEO of San Francisco-based Rewardli. "The smaller your business, the more value we add."

Founded in 2011, Rewardli offers 12 deal categories such as "advertising," "office" and "travel" from more than 500 vendors, who submit deal proposals for Rewardli's review. Members can also make and vote on deal requests, which Rewardli will try to negotiate with vendors depending on demand.

Related: Groupon's New CEO May Be Its Best Deal Yet

Ainsley Braun, 25, began using the platform two years ago to save on expenses for her Palo Alto, Calif.-based web security business, Tinfoil Security. "Whenever we have a new or large purchase, we'll go on Rewardli to see if there's a deal," Braun says.

In addition to saving on essentials, like business cards from vendor Moo.com, Braun says Rewardli gives her the freedom to try new services at no risk, as the company often allows users to test out services. "I got a deal for a trial on phone services, which I wouldn't have bothered with otherwise," she says.

There's also GroupPrice, a Redwood City, Calif.-based deal site, which boasts an even larger network than Rewardli with more than 700 vendors. The platform, which got its start in 2010, offers deals on business services such as web, mobile and marketing solutions. In addition to a free membership, there's also a premium option for $9 per month that shaves an extra 7 percent off all deal purchases.

Still reaping the savings from a Google AdWords marketing tool he purchased on GroupPrice, is Bryan Shonka, 28. Since implementing the tool at his Port Huron, Mich.-based e-commerce business, Goliath Holdings, he says, the results have been palpable. "We're seeing a higher click through rate and no longer wasting money on [buying ad words for] people who aren't relevant to us," Shonka explains. "I would say it's saving us $500 to $1,000 a month."

Related: Overcoming the Groupon Effect: How to Sell Merchants on Your Start-Up Deal Site

And there are many more deals to be had. Other B2B group-buying sites include:

While these platforms eliminate the time-consuming legwork of searching for, comparing and negotiating deals, entrepreneurs still have their work cut out for them, says Diane Helbig, president of Seize This Day Coaching, a business-coaching firm in Cleveland. Here are some tips for making sound purchases:

1. Set boundaries. "Don't let a steep discount drive your decision process," Helbig warns. "If you see a tempting deal on a product, ask yourself: ‘Is this something I'll use regularly?' If it's a service, ask: ‘Am I ready to implement this?'"

Related: Struggling Deals Site LivingSocial Kills Events Group, Closes New York Office

2. Read the fine print. It's easy to get swept away by a great offer, but make sure you understand the terms and conditions, says Alyssa Gregory, president and founder of Small Business Bonfire, a collaborative community for entrepreneurs based in Allentown, Pa.

3. Plan ahead. Buying a deal takes one simple action, but maximizing its value takes planning. You can get more leverage from your deal if you create a larger plan that includes activities before and after you buy it, says Gregory.

4. Shop around. GroupPrice member Bryan Shonka is happy with the site's deals but does his market research nonetheless. "Before I buy anything, I'll see if I can get it cheaper elsewhere," Shonka says. "I'll search other deal sites or go directly to the vendor's site to look for promotions. But most of the time, GroupPrice has the best offer."