Groupon copy-cat problem

The businesses who offer these deals write the potential losses off as marketing, because this is ALL it's about. Marketing. That is also why they need a certain number of people before the deal is on. They get people to come experience their service and get some volumes moving through the doors and they hope that those highly discounted customers will talk about their experience to their friends, or like the place/experience/whatever so much that they will come back and do business again next time paying the full price. It's also highly beneficial to small business that are just starting out to make a name for them selves and get the word out there that they exist. That is why you see lodges or restaurants that you never heard of. I'm sure some will be good and some will be bad, but hey at the crazy low prices you get these deals you can't really complain.

I do however think that this is the fad of the month and in a years time there will be much less of them around. But they will not die out completely. Think of auction sites from the late 90s.. Ebay, bid or buy, etc... they were the talk of the town back then, and now they are still around but everybody got used to the idea and use it when it fits.
 
Keeper said:
uh...how do you make a loss when you provide a service?
all those massage places are losing is their employees' free time.
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Providing a service is not free. Massage therapists expect to be paid a monthly salary. They usually get a commission from each treatment. Then there is rent for the premises, water, electricity, telephone and internet costs and other salaries to be paid such as the receptionist and manager/owner.
 
Andre said:
Providing a service is not free. Massage therapists expect to be paid a monthly salary. They usually get a commission from each treatment. Then there is rent for the premises, water, electricity, telephone and internet costs and other salaries to be paid such as the receptionist and manager/owner.
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Rent, salaries and some communications costs are administrative expenses and they are incurred no matter whether there is any service delivered. Water, electricity, commissions, phone call costs are operational expenses and they will roughly be in proportion with service delivery. Any client payment that is not paid out for operations costs contributes towards admin costs, and if that is paid, is effectively profit.
The first aim is to cover all costs and that can probably be done even through the specials.
 
Acquila game farm had a GroupOn recently @50% off, IIRC. In yesterday's Argus they have an advert offering their product at guess what, 50% off. I don't think they would advertise at a price which makes a loss for them, and depending on the take up of the GroupOn offer it will probably have cost them less than the advert.
 
And so Hilton Tarrant's prediction proved to be true. Wish I'd seen this thread earlier, as owner of one of these sites, I could have told you all about it.
 
I had a married couple who had started a Groupon like scheme and tried to franchise it. but didn't do their homework. SARS nailed them in the end
 
louisek said:
I had a married couple who had started a Groupon like scheme and tried to franchise it. but didn't do their homework. SARS nailed them in the end
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What did SARS nail them on ?
 
I read the article, that person doesnt know the industry. Its like saying ebay will fail cause there too many knock-offs, or that the market you go to on a sunday will fail because there are too many knock offs. Really? That has to be one of the dumbest arguments I have ever heard :/

Sure, and VHS was meant to kill movies and a photocopy machine was meant to kill books. #epicfail

I bought about half a dozen xmas pressies on groupon :D... and our local group website... www.eldeals.co.za :D I need a haircut for getting back to work and score it for cheap on eldeals :D

The woman who runs ELDeals.... with just an internet connection and an office at home. Gives me 10000x better support than Groupon does.
 
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Valis said:
Not really. People who bargain-hunt are very unlikely to come back and pay full price.
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I speak for myself only here, but one example of a Groupon I bought was a service for my mountain bike. The shop is in an area I frequent but was not really familiar with it. I took my bike in for the service and have subsequently used the shop on numerous occasions.

Of course there are places that I will never use again but then their product/services may be something that I have little use for while other people may be different. A few of the places I have been to the service and product offered was not of particularly high standard so I would not pay full price.

This is the great thing with this model. It allows me to personally assess different products and services. They need to be great to get me to come back though. Unfortunately some places do not view it as such and just want to temporarily increase foot traffic.
 
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