Groupon copy-cat problem

In my limited experience, all of the deals revolve around massages, pizza, suntanning and birthday baskets of over priced cosmetics.

Not really stuff I am in the market for.
 
Well, i think the model is more based on promotion value for users "write the loss of profit off as advertising fees", than a full time business.

Getting a person to buy your product [if it's any good] for half price, when they normally wouldn't even have considered it, might just land you a follow up purchaser.
 
As with any software system, once a company has shown a model to be successful, clones of that software invariably come to market. For example: you can buy a cloned copy of Facebook for about $300 and setup your own social network that has almost all the features of Facebook. Same goes for Hotmail and Gumtree, you can buy PHP apps that cone the workings of these sites and start your very own web-business.

This is not necessarily a bad thing as it lends itself to the easier creation of online businesses and it allows entrepreneurs around the world to replicate or introduce a proven business model into their own country.

With technological products, it's always best to have the first-mover status...Groupon will always be the king of the hill now, so copy-cats will always be in their shadows. I wouldn't hasten to say it's the end of the road for Groupon only now we will need to see some fancy-after-market add-ons being created to differentiate the offerings. For example: a group buying scheme could sell an add-on which will allow a merchant to bulk email/bulk SMS the database of respondents to their group-buying opportunity and the group-buying facilitator could provide tools for the merchant to enhance their relationship with people who respond to their opportunity. That way the group-buying marketing exercise is better leveraged by the merchant for longer-term benefits as the merchant is empowered to be able to continue their communication/marketing with respondents/customers/clients...

There will be a shake-up...but not a complete meltdown...
 
Personally i think the groupon craze is wrong. Sure you can get specials on things you wouldn't normally buy but there is no other draw feature is there? I like the foursquare + groupon and maybe soon to be facebook deals +places combo's whereby you encourage customer loyalty to drive specials, add the social aspect to it and you draw in their friends etc. see simple use of psychology to connect the tech better. Interestingly enough i see dating sites are now getting in on the act with okcupid launching a meetup addition to their app.
 
Bizkit87 said:
Well, i think the model is more based on promotion value for users "write the loss of profit off as advertising fees", than a full time business.

Getting a person to buy your product [if it's any good] for half price, when they normally wouldn't even have considered it, might just land you a follow up purchaser.
Click to expand...

Not really. People who bargain-hunt are very unlikely to come back and pay full price.
 
Buinesses would run at a loss if they did this EVERYDAY, but doing a one off promotion is good for gaining market awareness of your business and its other offerings.

Sigh, this article is dumb and doesn't deserve another minute of my time.

I mean really equating groupon ripoff sites to the dotcom collapse, really?
 
This was never going to be sustainable, so the best thing for me was to get a few good deals out of it while it still lasted. I'm happy with the couple decent pizza vouchers and a DSTV Drifta decoder at half price that I got :)
 
Valis said:
Not really. People who bargain-hunt are very unlikely to come back and pay full price.
Click to expand...

Agree this is the nature of bargain hunting! We go get a bargain and will then likely continue looking for other bargains! However there are the few that are so impressed with a seller (his service, his general manner, his business ethic etc.) that we actually do go back when we need something and cannot find a bargain :)
 
The whole point of selling deals through a deal site is to reach a tipping point where the deal is only valid if a certain number of deals have been sold in order make sure that the combined margins of every deal results in a net profit.
 
The problem with Groupon is that the concept and implementation of their business model can be easily replicated, so they had the first movers advantage, but this is a fallacy as the first movers only work if you have an unique and difficult to copy business model. To me, this is only a fad and if someone doesn't improve extensively on the business model, Hilton's argument has valid.
 
Guys this is purely promotional...

a lot of the stuff is also services...hence almost 100% is profit???
take the massages...they get people in to do the massages.
they are not selling a product...just a service...take a knock on that profit and you have customers flowing in your door...

and 20% (thumbsuck) might even loose or never user their coupons that they already paid for.

i bought a R120 eat as much as you can from cescos for two...

After drinks our bills was R400 + R120...(Drinks markup is enormous!)
We had starters....prawns...and desert...
they made their money...if you really are the stingy type then well good for you...

I for one love all the specials...
 
Add in the fast-diminishing base of businesses who are willing to discount goods and services and you suddenly realise why nearly every single one of these daily deal sites are littered with beauty spa treatments, dance classes and weekends away at non-descript lodges in places you’ve never heard of.
Click to expand...

Well put.
 
uh...how do you make a loss when you provide a service?
all those massage places are losing is their employees' free time.
(and lets not forget, some people may come back, or even recommend it to their friends ala "hey I went to this great massage place" which is the BEST Advertising)

collapse? sure....
 
Garyvdh said:
In my limited experience, all of the deals revolve around massages, pizza, suntanning and birthday baskets of over priced cosmetics.

Not really stuff I am in the market for.
Click to expand...

Yeap! I think its mostly 'pretty paper bags' that the try and sell. (where suppliers can afford to sell products for really cheap)
 
i love these guys,

i bought a 2.5'' 1 TB external for R600 via a Dealify / Kalahari.net deal.

paid for it in eBucks, so actually it didn't cost me anything!!!
 
Last edited:
From a business point of view, the seller most probably runs these "specials" at a loss (or they have huge margins if they don't) and I have yet to see a worthwhile return on the "advertising" element. This is especially true if your product/service is a once off buy, with little reason for a customer to return. To potentially generate more sales through return business MIGHT make this kind of promotion worth while, but if that is not the nature of your business, give this a wide berth. The only entity gaining from this is the "special deal website", the seller looses big time, and once the willing participating businesses have gone through the grinder, I do not see many of them returning for seconds...we definitely won't.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X