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"The thrilling demise of Groupon’s crummy business model."
Posted by: $tevie
Date: August 15, 2012 06:07PM
Quote

The fact that even Groupon is no longer banking on Groupons is fantastic news for everyone, especially all of us who are sick of morning email deal spam. But the biggest beneficiaries of Groupon’s problems are the world’s small-business owners, people who will no longer be taken in by its terrible deals. Today, Groupon’s stock is down nearly 30 percent. Its demise may not be imminent, but it seems assured. Let’s all rejoice.

This might sound harsh. After all, even if daily deals are a bad deal for small businesses, owners are signing up for them willingly. Why should we hate Groupon—a firm that is, after all, saving people money—for engineering these deals?

[www.slate.com]


"Stop thinking about art works as objects, and start thinking about them as triggers for experiences." ~ Brian Eno
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Dennis S
Date: August 15, 2012 06:41PM
Is this the company that was offered $5 billion awhile ago and turned it down? What are they worth now?
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: hal
Date: August 15, 2012 06:53PM
I shut off the daily spam years ago...

I never once participated - never found anything that I HAD to go for, but once I read an article about a small biz driven out of biz solely due to a deal with groupon and the unintended consequences. It was horrifying - die, groupon, die!
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Chakravartin
Date: August 15, 2012 07:04PM
What does this mean for LivingSocial? They just got a $32.5 million bribe tax-break to stay in DC with quarterly operating losses around $100 million...
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: john dough
Date: August 15, 2012 07:05PM
This is good news for the economy; for as much as I like discounts, it is a sign that the economy is strengthening.


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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: mick e
Date: August 15, 2012 08:57PM
The ponzi scheme winds down. The owners are laughing and high-fiving on the bridge of the Groupon Company Yacht as this thread develops. "This is how it's done, Madoff, you chump!"



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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Surfrider
Date: August 15, 2012 09:21PM
Not a Ponzi scheme.

Someone in my family works for Living Social, hopefully they are evolving their business model to avoid Groupon's issues.

Nobody is holding a gun to business owners heads. I know guys that have had deals on Groupon, some did okay, some not. I wouldn't do it, but my business doesn't deal with consumers, just retailers.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: mick e
Date: August 15, 2012 09:27PM
You are correct - a Ponzi scheme usually presents some sort of bogus facade. Groupon wore its unsustainable business model on its sleeve for all investors (patsies) to read.



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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Black
Date: August 15, 2012 10:27PM
Quote
mick e
You are correct - a Ponzi scheme usually presents some sort of bogus facade. Groupon wore its unsustainable business model on its sleeve for all investors (patsies) to read.
thumbs up


MR/F Guestmap: [www.mapservices.org]
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: vision63
Date: August 15, 2012 11:49PM
While I'm not gonna root for somebody to fail, the Groupon deals would be fine if they were really deals.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Surfrider
Date: August 16, 2012 08:16AM
RE: Investors, yup, Ponzi scheme, just like Facebook. Anyone who put money in either was a dope.

I was referring to Ponzi regarding the consumer.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Lemon Drop
Date: August 16, 2012 09:04AM
Never did "Groupon" but Amazon does this same thing, right? I get these localized "pay $25 for $50 in food at X Restauran" emails from Amazon almost daily. Same thing, right?
Yeah I wondered why a merchant would do that. Extremely expensive marketing that makes little sense for restaurants and other businesses with razon thin margins.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: davester
Date: August 16, 2012 10:01AM
Sounds like groupon uses the walmart business model, but they're destroying american businesses instead of foreign suppliers and american competitors.



"So be proud to be a decent American instead of just a w'anker whipping up fear!" - Michael D. Higgins, President of Ireland



Edited 1 time(s). Last edit at 08/16/2012 10:01AM by davester.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: Mac-A-Matic
Date: August 16, 2012 12:07PM
As a consumer, I like some of the Groupon deals - especially when I get double the money in value.

But as a business operator, I never understood the logic of selling a product for 25% of it's value (the amount you actually get from Groupon for the "deal"winking smiley. Reps from both Groupon and Google gave me the schpiel that similar businesses got something like $15,000 out of their "deals".

Sounds nice, but my expense on that $15K revenue is $20K, so I'd be screwed.

Don't know why any business would participate in Groupon or the like.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: $tevie
Date: August 16, 2012 12:47PM
A friend of mine who owned a small coffee shop was approached by Groupon and she said there was no way she could afford to do it. The idea is to bring in new customers, but she said if it was a successful promotion she'd be losing money on the gamble that any of those people would be coming back. Other businesses in the area were advising her that no, for the most part you get the deal seekers and you never see them again. She said it seemed like a huge waste to her.


"Stop thinking about art works as objects, and start thinking about them as triggers for experiences." ~ Brian Eno
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: kj
Date: August 16, 2012 12:58PM
My dad, son and I went go-carting the other day on a groupon. It was a good deal, and we'll be going back because it was fun. I would imagine they still made money on us even if we never went again, so I bet it is a good deal for them on the whole. That's what makes business tough. You have to make good decisions in an uncertain environment. kj.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: mattkime
Date: August 16, 2012 01:39PM
It definitely works better for some businesses than others. i'm happy to see the coupon company deflate as anyone else but its hardly a scam.


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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: lafinfil
Date: August 16, 2012 01:45PM
In the example from kj (go carts) it can probably work out OK if the overhead on the "deal" is low. There were lots of stories from vendors that required inventory (mainly food items) that sold their deals at cost or less and had to wait so long for the reimbursement from Groupon that it basically screwed their cash flow. In some cases the waiting forced their closure.


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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: vision63
Date: August 16, 2012 03:36PM
Quote
lafinfil
In the example from kj (go carts) it can probably work out OK if the overhead on the "deal" is low. There were lots of stories from vendors that required inventory (mainly food items) that sold their deals at cost or less and had to wait so long for the reimbursement from Groupon that it basically screwed their cash flow. In some cases the waiting forced their closure.

I suppose this would be the definition of what was or was not a worthwhile Groupon experience for all sides.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: mrbigstuff
Date: August 16, 2012 06:43PM
businesses got smart - eventually - and now offer deals like a $8 coupon for $5, knowing that all items are around $8, so you'll be spending more than that anyway. my local BBQ joint has a $7 for $15, which is great (for me) but I don't understand it since they are busy regardless.

OTOH, some businesses get a huge infusion of cash right away. it's often a last gasp.
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Re: "The thrilling demise of Groupon’s crummy business model."
Posted by: RgrF
Date: August 16, 2012 11:12PM
The huge infusion is the carrot, we bought a fusion mattress that was probably over stock for a fraction of the retail. If I were a business (which I am) I'd probably avoid Groupon, a consumer dosen't have those same realities to deal with.
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