The Business of Selling Discount Cards
By Steve Gillman
I did it all wrong when I tried selling discount cards at
the age of twenty. My basic idea wasn't a bad one, but it was
poorly executed. I was going too cheap on the card materials,
to low on the pricing, and I had no sales experience. Nonetheless,
I did get five local merchants to agree to offer a 10% discount
to anyone who presented the card to them. (This was about thirty
years ago, by the way.)
That part was easy, since it cost them nothing to participate
(a mistake perhaps), and I only approached businesses that could
easily still make a profit after offering 10% off. My vendors
included a bookstore, a restaurant, an auto repair facility and
a two others I no longer recall. I promised each that they would
be the only one of their type on the card (one bookstore, one
car repair place, etc), giving the card holder a reason to come
to them versus any other business of the same sort.
It was called "The Christmas Discount Card" or something
like that, and would be good for a year. I planned to have them
printed with the names of the ten businesses on cheap business-card
stock for about 5 cents each. Then I would sell them for $2 each.
A co-worker at the fast-food restaurant I was working at agreed
to talk to her high school coach about doing a fund raiser and
having students sell the cards. He agreed, and we were offering
them a dollar for each card sold, leaving us about 60 cents each
after expenses. He said he could get the kids to sell 1,000.
What made me think making only $600 split two ways was worth
the effort? I was young. In any case, the plug was pulled when
the school board decided that there had already been enough fund
raisers for the year.
The selling of discount cards is done in a variety of ways,
but they are almost always printed on higher-quality cards than
what we planned, and sold for more. In fact, in that same town
where I was living and planning my own venture, there was a card
which was sold by the thousands each year for $39 each. It included
a free pizza (the card publisher reimbursed the pizzeria $2 for
each tiny circle they punched out of the card--at least any that
didn't get lost), and a $10 oil change (the break-even point
for oil changes at the time, and so a way to get new customers
who would hopefully return and pay full-price).
How Much Can You Make?
There are a number of companies that do this directly or as
the provider of the service for groups who want to have fund
raisers, but there is not good data available on what they make
from the cards, especially since some do that as just one part
of their marketing company. But lets speculate and say that the
high-end offers of $29 or $39 net $10 per card after expenses.
Do an annual promotion in a town and sell 1,000 of the cards
and you make $10,000. Have these deals running in a dozen towns
near you and your revenue would be over $100,000 per year. I
should note though, that a some quick research online seems to
indicate that a $10 card price is more common.
Ways to Make More | Related Opportunities
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Some companies charge the retailers who participate a "registration
fee," which might cover the printing cost of the cards,
keeping the initial investment down and increasing the total
profits.
Cards should always have an expiration date, or retailers
will be vary about participating.
Qualifications / Requirements
If you're willing to get out there and talk to retailers who
might want to participate, and you have a thousand dollars to
invest, you can do this in one form or another.
First Steps
Talk to those shop owners and see if there is any interest.
Talk to a print shop to see what it would cost you to print up
a thousand nice plastic-coated cards and perhaps a flyer and
envelope to go with each. See if there are any groups who can
do the selling for you, or see if retailers who participate are
willing to sell them. Make a plan, then crunch the numbers to
decide if your plan makes sense.
Resources
http://www.fasttrackfundraising.com/discount-card-fundraiser.php
- A company that helps you do discount card promotions, even
supplying the forms for the merchants you sign up.
http://www.fundraising-newsletters.com/discount-card-fundraiser.html
- An article on selling discount cards.
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