Market Overview

How to Start a Successful Daily Deals Site


It's harder than it looks.

But after watching the success of Groupon (NASDAQ: GRPN), many entrepreneurs think that they can rise up, offer a few hot deals, and become billionaires. That's not the case.

However, that doesn't mean that Groupon is the only success story within the growing industry. In addition to Amazon's (NASDAQ: AMZN) LivingSocial venture, there is one rising star within the realm of daily deals: 1SaleADay.

Ben Federman, the founder and CEO of, started his company without any loans or investments. “It was pretty much just me putting in everything I had,” Federman told Benzinga. “It took time before we got to a profitable state – quite a while, actually. We had found our way to get users and customers. We figured out our little niche on how to spend marketing dollars, and uniquely grow the business.”

Eventually, Federman said that 1SaleADay got to the point where, as far as inventory was concerned, “you have hundreds of thousands of daily visitors, and they're looking to buy whatever you feature.”

“Having funding, being able to buy in advance – 30 days out – can be quite costly,” Federman explained. “The main focus of the investment was getting the ability to have what we call ‘unlimited buying power' to get whatever we need. We know what our customers are looking for. We know the price. We know what a good deal is, and it's really about better brand names, better items, and we also spent some of the funds on a big move down to Florida to help us streamline the process to speed up shipping.”

Federman said that right now, the biggest focuses within the company are “strengthening customer support, strengthening quality control, strengthening the streamline of shipping.”

“[In the past], when you're not buying items in advance and you're not able to buy everything all at once, we'd have to ship a few days after you make the sale because you're waiting for merchandise to come in or you're buying it as it sells,” Federman explained. “Now, we're buying in advance. We've got a huge facility that we're filling up with merchandise and a lot of cool stuff.”

Acquiring great merchandise is just one part of the business, however.

“Having wonderful partners is also very important and very motivating,” said Federman. “When you're on top, you kind of run your own operation. You have an advisory board and people that are in key position. Those folks give advice and whatnot but it's a little different when two partners are motivating each other. It gives each partner fire, it gives each partner excitement. They've helped me raise the bar. They have the same vision as I do.”

Ultimately, Federman said that his partners are not looking to take the business and turn it into something it's not. “In building this site, I've told my customers that they can come to us for the best deals,” he said. “And no matter what we feature, we're known for the best deals, no questions asked. You're not gonna find it cheaper anywhere else.”

Follow me @LouisBedigian

Full Disclosure: Lightbank, the technology investment vehicle from Groupon co-founders Brad Keywell and Eric Lefkofsky, is one of Benzinga's investors.

Posted-In: 1SaleADay Amazon Ben Federman Groupon LivingSocialSuccess Stories Startups Tech Best of Benzinga


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