Group buying aggregators in South Africa

Ever since the first five group buying websites in South Africa were founded, a few bright minds had the idea of putting all the deals on one website, and in doing so they gave birth to a second wave of daily deal websites. Actually, the first time I heard of it was in a meeting with Andy Hadfield and Henk Kleynhans, where Henk suddenly came up with it. Although by that time it was already present overseas.
The advantages of starting this type of site gives one the same tingle as social buying sites do – they are so easy to start up and seemingly only result in everyone making massive profits. But, as collective buying websites have proven by failing, this is not necessarily the case, and the returns are harder to realize and smaller than you would think. Dealify closed, Zappon closed, Dealio closed and so have many of the smaller sites that were never really on the map.
And so is the case with aggregators now. The returns are small and one actually requires sending a great deal of affiliate traffic through to get the site earning you some money. Add to this the fact that many group buying websites do not even have affiliate programs (although there are now third party programs like AdMarula) and also that some of them do not pay you, and you have a recipe for failure. Groupon, for example, has been noted by aggregators as being exceedingly difficult to partner with.

So before you go and knock up an aggregator for deals, think about everything carefully. Here are some misnomers:
1. The setup is easy. Actually, a bunch of RSS feeds (like the one at the bottom of UbuntuDeal) on a page with a search function will not create as many click throughs – you need a personalized website with profiles, emails going out and customization once they click on something.
2. They are easy to maintain. Staying in touch with and managing clients from both sides is not easy – your group buying websites supply you with the deals and your customers who buy them complain to you if they don’t work out.
3. Revenue is not going to be as much as you think, at least not at the start. Until you’ve racked up a good lot of referrals and loyal customers to your site instead of the group buying website, you’re going to earn a low amount.
4. As mentioned in the first point, traffic is hard to come by. Being an aggregator, you should think that traffic will start to flow to you. However, there are now almost 10 aggregators and some of them with over 4,000 Facebook fans and others with large databases of email addresses to start with (no questions asked as to where those addresses come from, though).
Overall, the group buying scene is still maturing and we’ll see some sites die and others thrive, but my opinion is that the aggregators will gravitate towards the larger websites within South Africa. I just wonder why Gumtree hasn’t given this a shot“¦