LivingSocial Exceeds One Million Amazon Gift Cards Sold With Hours to Spare

LivingSocial’s goal when it offered a $20 Amazon gift card for $10 today was to achieve the biggest selling one-day item in online history.

And, it’s pretty close. UPDATE: In the end, LivingSocial sold more than 1.3 million vouchers.

Over the course of the day, which started at midnight and will end 29 hours later at 4 a.m. local time, the gift cards were flying off the virtual shelves at 99,400 an hour, 2,000 a minute and 85 a second.

At 5 p.m. Pacific, LivingSocial had hit 1 million sales in total.

While there’s no real official record keeping for this sort of thing, there’s some indications that LivingSocial is now the record holder — or at least close.

At $10 a pop, LivingSocial has sold $11.76 million worth of Amazon gift cards, as of 8 p.m. Pacific. Its closest competitor, Groupon, for example, once held a one-day deal with the Gap, which generated $11 million in sales when it sold 440,000 vouchers at $25 apiece.

Likewise, if we look at just the rate people are buying one, it’s exceedingly fast.

On Amazon’s peak holiday day for 2010, customers bought record-breaking 158 items per second across all product categories. LivingSocial is doing about half that speed for one single product.

There’s some speculation about how much money LivingSocial will make on this deal. Typically, merchants agree to sell the vouchers directly to the customers, and then LivingSocial takes a 30 percent cut. In today’s offer, the New York Times is reporting that LivingSocial bought the gift cards from Amazon and is selling them itself. It’s unknown who will lose money on the deal.

In an interview, LivingSocial’s CEO and Co-Founder Tim O’Shaughnessy would not comment directly on how the deal was structured but said it’s only the beginning to a relationship with Amazon, which started when it recently invested $175 million in the company.

“It’s not a normal deal. We are trying to figure out ways to leverage the relationship with Amazon. It made sense to both companies and we knew it would resonate well with customers.”

The primary goal is to attract new customers, and that’s working, especially with the help of social sites, like Facebook and Twitter. “My Facebook feed has been a beautiful site today,” O’Shaughnessy said. “It’s true social commerce because of the amount of sharin gon Twitter and Facebook feeds.”

Of the roughly tens of thousands of times today that users have officially shared the deal through the LivingSocial site, he said it has resulted in hundreds of thousands of new customers — and that’s just from what they can track officially. That doesn’t include emails users sent by pasting a URL into a message — those informal means happen all the time, including one O’Shaughnessy got from an absent-minded college friend today.

With more than one million already purchased, he estimates the deal could generate a million new users by the end of the 29 hour period.

In lots of ways, this deal is different from others.

Mostly, LivingSocial and its competitors, like Groupon, have focused on selling deals to local merchants, who need a better avenue for getting the word out about their services or products. Previously, LivingSocial has done national promotions, but only on a limited basis with smaller brands, like Wine.com and Bonobos, a men’s clothing store. It also partnered with Visa. Participants who purchased a deal with their Visa card, received another one for free for a friend.

O’Shaughnessy said they will continue to explore deals that they think people would like — local or national. Will it be with Amazon again? “We certainly think it went well, but we’ll see if there’s other ways to work together.”