CEO Insider

Why LivingSocial sold $20 Amazon gift cards for $10?

On January 19th, Group buying site LivingSocial which sells vouchers for restaurants, spas, retail stores, teeth whitening and other services, usually at 50% to 90% off — released a “once-in-a-lifetime” deal for a $20 gift card to Cost: $10.

Deal: What’s rarer than spotting a snow leopard, Halley’s Comet, and Mark Wahlberg with a shirt on? Answer: Today’s once-in-a-lifetime deal. Pay just $10 and get a $20 gift card to use at, the largest online retailer. Whether you are looking for something usual, like a book, or unusual, like a Borat-style mankini, you’ll find it among the millions of products listed on the site. Or, if you’re hankering for something that really stands out, put your 50%-off gift card toward the revolutionary and bestselling Amazon Kindle device. Just be sure to act fast, because deals like this only happen once in a blue moon.

Click here to check out the the deal for yourself.

Last December Amazon had declared there $175 million investment in LivingSocial, to help the site locate in various other regions. Groupon made headlines last year when it offered $50 Gap gift cards  for $25. The site also partnered with American Apparel and Body Shop to offer discounted cards. LivingSocial Amazon deal is open for only it’s US customers but the site is now be accessed in Canada, UK, Ireland and Australia. Amazon hopes LivingSocial to earn a revenue of $500 million in 2011.

CLAIRE CAIN MILLER at NYTimes wrote, The attention that the high-profile, national deals receive is a useful marketing tactic for the daily deal sites, because they get people to sign up and then become local customers afterward. The Amazon deal is giving LivingSocial, which is Groupon’s biggest competitor but has been living in its shadow, a big publicity boost.

So while LivingSocial and other daily deal sites were conceived as a marketing tool for small businesses, this particular promotion is more of a marketing tool for LivingSocial.

Answer to the question Why LivingSocial sold $20 Amazon gift cards for $10?

Investment deal synergy

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Jessica Todd Swift
Jessica Todd Swift is the deputy managing editor of the CEOWORLD magazine. She is a veteran business and tech blogger, journalist, and analyst. Jessica is responsible for overseeing newsroom assignments and publishing and providing support to the editor in chief.