Recently the group-buying sites in india have started putting up offers like the following
Buy this offer for company X, at Rs.RR and buy yourself a chance to enter a contest to win product P
Buy this offer for company X, at Rs.RR and buy yourself a chance to enter a contest to win product P, at a discounted price
Now this is simply a strategy to get more eyeballs to enroll for a lottery contest. Nothing is wrong here, ethically, logically and legally it is very much correct way of getting more people to buy into this lottery.
You don’t really get the item. Agreed that investing amount X in this offer and it doesn’t yield, you get a “gift certificate” of equal amount that can be redeemed atht esame website.
So 1/2/3 people may win this product based on a lottery system.
Now this kind of offer is not really group buying and is an intelligent way to generate revenue and possible attract new users.
I just tried to work on the revenue aspects of this offer based on some assumptions.
Now this itself is very much like a lottery. Group buying websites actually running a lottery model in garb of group buying offers may or may not be ethical, but who cares
So at this moment, May 26, 2011 exactly 3.26 pm, there are 504 instances of this deal that were bought.
Following is my analysis and the revenue the website will make based on some assumptions
|
Price |
INR 99.00 |
|
Number of buys |
504 |
|
Total money received from deal sale |
INR 49,896.00 |
|
Actual cost of product |
INR 25,000.00 |
|
Actual price of prioduct |
INR 30,000.00 |
|
Number of give aways |
1 |
|
Cost of giveaway |
INR 30,000.00 |
|
Cash accumulated (cash that will go no where) |
INR 24,896.00 |
|
Total buyers who have been awarded 990 points |
503 |
|
Equivalent points awarded |
497970 |
|
Validity of the points |
60 days |
|
Hit ratio (Ratio that users will utilize the 990 points in next 60 days) |
70% |
|
Buyers utilizing the 990 points each |
352 |
|
Deals getting sold post the offer for redemption of 990 points |
Deal Price |
%age share of the deals getting sold |
Number of buyers utilizing specific deal and using 990 points |
Revenue from deals |
Assuming margin of 5% |
|
Buyers buying deals worth 99 |
INR 99.00 |
30% |
105.63 |
INR - |
0 |
|
Buyers buying deals worth 199 |
INR 199.00 |
30% |
105.63 |
INR 10,563.00 |
INR 528.15 |
|
Buyers buying deals worth 299 |
INR 299.00 |
30% |
105.63 |
INR 21,126.00 |
INR 1,056.30 |
|
Buyers buying deals worth 399 |
INR 399.00 |
10% |
35.21 |
INR 10,563.00 |
INR 528.15 |
|
|
|
|
|
|
|
|
Total |
|
|
|
INR 2,112.60 |
|
|
TOTAL |
INR 27,008.60 |
Guys it seems I have cracked the algorithm code for contest deals running on mydala
according to me if you buy vouchers worth half the actual price of the product, u will surely win the contest. 
all the best!!!
Dear Nitin, this is a very good study that you have made. This has led to few questions in my mind, I would be grateful if you can answer this to me.
Q 1. How did u get to the fine details of this model, as in to the reliable source of the exact numbers.
Q 2. The table or revenue showed here is of how much time frame? You have mentioned the ending time but somehow I want to know the starting time.
Q 3. Can you illustrate such live websites actually following this model.
Q 4. If you can throw some light on websites like snapdeal where they are they are not the actual sellers but service providers.
I would be glad to see your reply on this post here as well as in my email.
Dear Nitin, this is a very good study that you have made. This has led to few questions in my mind, I would be grateful if you can answer this to me.
Q 1. How did u get to the fine details of this model, as in to the reliable source of the exact numbers.
Q 2. The table or revenue showed here is of how much time frame? You have mentioned the ending time but somehow I want to know the starting time.
Q 3. Can you illustrate more such live websites actually following this model.
Q 4. If you can throw some light on websites like snapdeal where they are they are not the actual sellers but service providers.
I would be glad to see your reply on this post here as well as in my email.