The questionable daily deals business model is looking like it’s about run its course. Groupon’ share price had dropped 82.7% since it initially floated while at a local level TradeMe has decided to sell its tilt at this model TreatMe for a “non-material” amount. It’s a model that appears to have been floored from the start with retailers being the long term losers. Some of these retailers that rewardjunkie! spoke to when undertaking our initial market research told us that they were underwhelmed with the model as they had to give up an average 50% of their sales revenue, then pay 30%-40% back in commission the remained of which is not paid to them until 30 days later. Then the final indignity is the retailer doesn’t actually get access to the customer database of those who took up the deals so if they want to re-market to them they need to go through the whole loss making process again. And it appears that the one bastion of potential profit for retailers, the revenue generated from customers who never actually take up the deal, is about to go south as well as the daily deals companies look to change their terms and keep this money themselves rather share with the retailers. So the question now remains how long retailers will continue to support daily deals and what’s next…

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