All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

Guess they don't have rainchecks across the pond.

ihatedumbpeople: All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

Especially these days. 99% of people aren't looking to make a connection with a store anymore, they're looking to save money anyway they can.

ihatedumbpeople: All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

I agree.

Also, why offer coupons that would cause you to take a loss anyway? Why not offer a coupon that just causes you to make a much smaller profit, or at the least break even on your product. If you have your name and a coupon on Groupon then idiots are going to come to your store anyway, make the coupon 10-20% instead of farking 75%.

$13 BILLION bucks for a coupon selling company? I've retired to Bedlam!

Between Groupon [and yea, it was a bad idea not to limit it either in number or in discount - 75% off? Whose brilliant idea is that? At 50% would probably have not lost money at least], and YELP, WTF anyone would want to be in foodservice.

Groupon started, of course, in San Francisco, and the very first business were sorry. I guess they have a hell of a sales force that can convince people to keep doing this.

FTA: "at a cost of $19,500 (£12,500) - wiping out her profits for the year."

Wow, she must do her job for the love cause I wouldn't want to own a business only making 20k a year.

Apparently this business owner never read how badly most businesses get burned by the Groupon business model.

Lemmy Kilmister: maybe if the limey lady had spent a few minutes looking at "what can go wrong with this idea" she would not have put herself in this situation.

stop blaming third parties for your bad business, or personal decisions.

It's the new order of business. It's the new order of everything, actually.

It's always someone else's fault. Just look at any thread in the politics tab. It's always someone else's fault.

Also, I'd like to add....$40 for 12 cupcakes? Really?
She sold them for $10 and lost anywhere from $2.90 to $4.70 each batch. Thats a profit of somewhere between $27.10 to $25.30 each batch she sells at full price. Holy shiat people are stupid for paying that much.

That's the way the cookie cupcake crumbles.

did someone ever seriously buy 12 cupcakes for 40$?

is her claim really that she "loses money" when selling 12 cupcakes for 10$?

i'm guessing that "cupcake" means something else in british english. seriously.

also, if 20k $ is the annual profits, she must really love baking.

Hey my home town on fark for the first time. Never heard of this bakery though and she should have limited the offer or something.

ihatedumbpeople: All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

I've used Groupons and I agree. It never bought my loyalty and I never went back to spend full price anywhere that I've used Groupons. I'd certainly never participate as a business owner.

Piss poor business knowledge if you don't know what your break even pricing is. No wonder you only make $20k of profit per year.

eas81: FTA: "at a cost of $19,500 (£12,500) - wiping out her profits for the year."

Wow, she must do her job for the love cause I wouldn't want to own a business only making 20k a year.

The business makes $20k profit... She takes home a $100k salary.

I've never used Groupon - is there any particular reason why simply telling people "No, we're out of stock" wasn't an option?

Lemmy Kilmister: maybe if the limey lady had spent a few minutes looking at "what can go wrong with this idea" she would not have put herself in this situation.

stop blaming third parties for your bad business, or personal decisions.

From the article: "Without doubt, it was my worst ever business decision." I'm not so sure she's blaming Groupon. She talked about how hard she worked to take care of all the customers, that she wanted to keep her standards high, and that she didn't think she'd be doing it again. Given her admission that it was a bad decision, I think she handled a difficult situation in a very admirable way. Not sure she deserves the hate on here. The article merely describes her experience and how she handled it.

I don't really see her complaining about Groupon like I've seen in a lot of articles where business owners complain that they were tricked, or Groupon pressured them into giving too big of a discount, etc. She's just saying that they got a bigger turn out than expected and how she handled it.

/Neither pro- nor anti-Groupon

Holy Cow! $10 a dozen and she's not making out? Too bad she had to make her employees slog for a change - I slog here in the US every day.

She made money and the percentage of repeat customers will make her money and this article made her money.

Fluorescent Testicle: I've never used Groupon - is there any particular reason why simply telling people "No, we're out of stock" wasn't an option?

With groupon you pay for the goods before you receive them. You'd pay $10 for the dozen cupcakes today and sometime in the next two weeks you'd go to the store hand in your voucher and walk out with the cupcakes. Groupon.com gets $5 and the bakery gets $5.

Somehow I don't feel bad for her. She should have a higher profit margin on the deal, just in case something like this happened. And then, when this did happen, she should have simplified her cupcakes to make them cheaper to make.

Theaetetus: eas81: FTA: "at a cost of $19,500 (£12,500) - wiping out her profits for the year."

Wow, she must do her job for the love cause I wouldn't want to own a business only making 20k a year.

The business makes $20k profit... She takes home a $100k salary.

Was going to post that business profit is generaly minus salaries. I'm sure she'll be fine.

We had some $3 muffins at college, and they were delicious. They were also about 5 inches across. (20 years ago)

/off my lawn, dandelions

Lemmy Kilmister: maybe if the limey lady had spent a few minutes looking at "what can go wrong with this idea" she would not have put herself in this situation.

stop blaming third parties for your bad business, or personal decisions.

While the headline says she was "burned" by Groupon, nowhere in the interview does she blame anyone but herself. "Without doubt, it was my worst ever business decision," she told the BBC."

Mattyb710: Also, I'd like to add....$40 for 12 cupcakes? Really?
She sold them for $10 and lost anywhere from $2.90 to $4.70 each batch. Thats a profit of somewhere between $27.10 to $25.30 each batch she sells at full price. Holy shiat people are stupid for paying that much.

Clearly, the cupcake craze has gotten a little out of hand.

But, this illustrates that if she'd just offered the deal at 50% -- still a hefty discount -- she'd have made a profit of between $5.30 and $7.10 per dozen. Assuming the same participation (granted, an unlikely assumption) and taking an average profit of $6.20 per dozen, she would have had a profit of $63,240 on the deal. If $19,500 really is her profits for a year, she could have made multiple times that on this one deal alone (not counting any future business she might have gotten). I think it's pretty clear where she went wrong in this process. Business tip: if you're going to offer a deal that is expected to have huge participation (what Groupon offers), for the love of God, don't offer a deal at a loss. Small profit with high volume = good. Small (or large) loss with high volume = not good (unless you can be damn certain you're going to have repeat).

rockmoss: Somehow I don't feel bad for her. She should have a higher profit margin on the deal, just in case something like this happened. And then, when this did happen, she should have simplified her cupcakes to make them cheaper to make.

I'm glad that she didn't change things. She made a poor decision, but instead of cheating the customers because of her own mistake, she honored all the agreements and even worried about putting out a good product. The fact that she seems to care about quality and doing what's right would make a permanent customer out of me (and also make me fat)...provided she had her business anywhere near me, of course.

Fluorescent Testicle: I've never used Groupon - is there any particular reason why simply telling people "No, we're out of stock" wasn't an option?

You pre-pay for the product. I've used Groupon, and while NO company has my loyalty, I have gone back to places I've had one for. Specifically, a water park I previously didn't know existed, and a propane tank exchange service "to your door". I've purchased full price numerous times from both.

Mattyb710: ihatedumbpeople: All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

I agree.

Also, why offer coupons that would cause you to take a loss anyway? Why not offer a coupon that just causes you to make a much smaller profit, or at the least break even on your product. If you have your name and a coupon on Groupon then idiots are going to come to your store anyway, make the coupon 10-20% instead of farking 75%.

I thought places could limit the number of Groupons offered...

How big were these cupcakes?

\Not impressed.
\\One of the funniest shows I've seen in a long time

rockmoss: Somehow I don't feel bad for her. She should have a higher profit margin on the deal, just in case something like this happened. And then, when this did happen, she should have simplified her cupcakes to make them cheaper to make.

I'm not so sure that this would have been a good response to a bad situation. If she was selling her cupcakes at a loss (I'll assume she realized this...just didn't anticipate the volume), then the only possible way that the Groupon decision makes sense (i.e., the only way to recoup her marketing investment) is if people are so impressed with her product that they'll come back. Compromising the quality of her product at that point would seem like a very bad idea.

"forced"?

No, they offered to do it when they signed up with Groupon. Did they think nobody would take their product at 75% off?

ihatedumbpeople: All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

I'm going to disagree. I joined Groupon specifically to be able to try new restaurants at a discount. Ended up finding my new favorite restaurant (and a couple of others that I might not have tried, but have turned out to be good) that way. Not only do they get repeat business from me, but they also get free word-of-mouth advertising from me as well.

\your point is probably valid for many Groupon buyers, though

eas81: FTA: "at a cost of $19,500 (£12,500) - wiping out her profits for the year."

Wow, she must do her job for the love cause I wouldn't want to own a business only making 20k a year.

This is most likely the business profits AFTER her own hefty salary is taken from it... otherwise; WTF?

Pharmdawg: We had some $3 muffins at college, and they were delicious. They were also about 5 inches across. (20 years ago)

/off my lawn, dandelions

LMAO I actually miss the old coffee machine in my college - have seen the exact same machines in various other places and states, but they all spit out horrible coffee (or takes your money, no cup and pours the coffee down its own drain and winds up with a dent in the front). The Cafe Mocha from the one in college was perfection; perfect mix, froth and even tasted like a sprinkle of finely ground coffee bean was put in the froth.

/anyone else notice Fark is slower than a herd of turtles stampeding through chunky peanut butter today?

So Groupon delivered the good lots of new customers and get the blame for this women's STUPID move . As muwaryer said a 50% or even a 60% discount would have profitable. Now all of her customer know how much profit they make on a dozen cupcakes . I wonder how many will quote the article and demand a discount !

She also lost between $2.90 (£2.50) and $4.70 (£3) on each batch she sold, the BBC reported.

"Without doubt, it was my worst ever business decision,"

Offering products at less than cost, effectively paying people to take away your products is not a good idea?

Colour me pink!

8DragonFark:

I thought places could limit the number of Groupons offered...

I believe they do, but I'm wondering if Groupon charges an even larger premium on that.

I bet she just never ran the numbers in a "best case" (ie tons of orders) scenario.

Mattyb710: ihatedumbpeople: All I ever hear (both on the interwebs and in local papers) is how businesses end up losing out by offering a Groupon. Sure, the 'idea' is that you'll get repeat business from the deal, despite possibly losing a bit up front but making up for it in the long run. But the problem is, the people using Groupons aren't loyal, they'll go to whomever has the deal and that's it...

groupon...okay for customers, can't possibly be good for businesses...just my take.

I agree.

Also, why offer coupons that would cause you to take a loss anyway? Why not offer a coupon that just causes you to make a much smaller profit, or at the least break even on your product. If you have your name and a coupon on Groupon then idiots are going to come to your store anyway, make the coupon 10-20% instead of farking 75%.


"Maybe there is no profit on each individual jar, but we'll make it up in volume."

Good lord, you people are some morons - have you ever taken a business class? I run a small business and Groupon has been calling me about three times a week about getting on their roster. First of all, in order to work with them, the pretty much demand a 50% deal at the least. Second of all - for all you idiots asking "durr hurr, what an idiot - why would you do this?" There's a "loss leader" at play here that makes sense in theory: If you have a product you are confident about and are having trouble getting people through your doors, it's a good way to introduce people to your product/store/restaurant, whatever. Groupon is, for better or for worse, spam that people actually opt in for and will read every day.

HOWEVER - it can definitely torpedo your business if you don't read the small print. Groupon (clearly) wants to sell as many coupons as possible. They get the lion's share of the money and then dole a percentage out to the businesses over the course of a few months. If you ask them, they will admit that you can PUT A CAP on the number of coupons available so that you don't put yourself in the position of working for months with zero chance profits.

Most business owners are in a position of desperation and figure that the more the merrier and have a mistaken perception of the number of people who would actually purchase a Groupon. Customers are just looking for good deals and are also acting from a place of desperation.

Luckily for me, my business is thriving without these desperate gimmicks AND I have a close friend who ended up giving away 1200 free breakfasts in three months and narrowly avoided foreclosure.

At any rate, before you say "durr hurr, stupid lady" - think about all the factors. It's a tough environment out there for small business owners.

/also a customer of GroupOn
//found some great local places through GroupOn
///The more you know....

santadog: Groupon hit up my Scooter Rental Shop this summer.
They want you to offer no less than 50% off your item.
Groupon get's 25%.

WIth Groupon, I was not able to limit the amount of coupons given out.
I was not able to black out days except for a holiday.

I did not use Groupon.


I've read some articles that said that all of this is negotiable, but don't have any personal experience. It may well be that Groupon is doing so well (either in general or in certain cities) that they don't negotiate much. I've also read that their first offer is that they keep 100% of the initial take, but willingly agree to split the money if you negotiate.

Even if this woman wanted to give a 75% discount, she could have done so on one cupcake rather than a dozen. This would have protected her in a couple ways: (1) she probably has a higher profit margin on singles than dozens (which typically already are discounted), and (2) it would have been far more likely that people who came in with the Groupon would have purchased something else (e.g., a cupcake for later or for a friend) at full price. That's another way businesses make profit using Groupon.

santadog: Groupon hit up my Scooter Rental Shop this summer.
They want you to offer no less than 50% off your item.
Groupon get's 25%.

WIth Groupon, I was not able to limit the amount of coupons given out.
I was not able to black out days except for a holiday.

I did not use Groupon.

I've been looking at doing this to drum up business for my bakery in my (relatively small) town. Do you mean Groupon want's 25% of the profits, or 25% of the value?

IE - Cupcakes worth $20, you sell the deal for $10's, and Groupon gets $2.50, or do they get $5?

When you work out a deal with Groupon or dealfind etc. they are very insistent your deal be offered at a very low price. They strongly insist that the deal be an extraordinary percentage off retail price in order for the deak to be attention-grabbing. They then receive half the revenue from each groupon bought. So whatever slim margin you retain after heavily discounting your product or service is wiped out into a loss after groupon takes their (large) cut.

So the partnership is a terrible idea in the short term. You're gambling on repeat business, which of course is NOT guaranteed given the fickle nature of groupon's online clientele. It ended up working for my sister, who is a photographer, but she ended up making something around $1.50 an hour for her 50 shoots. Now she enjoys repeat business, but she's one of the lucky ones.