Groupon: It makes sense. If you want to attract people who want to spend money (i.e. shop) in order to up your ad rates and revenue, offer really good discounts to visitors and do so on a daily basis to keep pulling people into your site. That's basically what Groupon is doing, and at least for now, it seems to be doing well. Whether it is sustainable or not is another questions.
Some have suggested things will have to evolve in business terms so that there is more "room" for making revenue, for both Groupon, and the vendors, while still offering shoppers a discount big enough to attract them. At the moment the jury is out on whether the Groupon approach will succeed with products and services generally, or whether it will be business-effective only for high priced, high margin luxury items.
Stay tuned.
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Top : Groupon: Groupon may be the fastest growing Internet company in history, and is in play as a takeover target. Learn more about it, and how Groupon is being used by businesses in the social media space.
Articles:How Groupon (the fastest growing company in web history) Recruits the Best - by Hillary RobertsHow does Groupon find and hire the right talent to continue to make history? What social recruiting tools do they implement? Recruiting has evolved and social media has become the new medium for organizations to tell the stories and create the associations that will attract the right as well as top talent. Groupon, the fastest growing company in web history, according to Forbes magazine, packs a full arsenal of recruiting strategies to find and hire the right talent. For them, it's as much about how strategies are used than which ones are implemented. Any company can learn from the social recruiting practices that VP of HR Dan Jessup has integrated throughout the hiring process. Join the Human Capital Institute and Jobvite for this free webcast to learn how to find and/or vet talent that fits your company by building human connections through social recruiting. (Added: 30-Nov-2010 Hits: 107 ) Should You Use Groupon For Your Small Business? - by na You might have read some Groupon horror stories already, but the reality is that Groupon is extremely expensive. If you look at their faq, they give off the impression that running a Groupon campaign is free. They collect the money online from prospective customers, send you a check and mail out the coupons automatically. What is not explicitly spelled out is that they take 50% of your revenue as a fee for using their service. So given that most Groupon campaigns offer the end customer around 50% off, let's run some numbers here. Say your product retails for $100. By giving a 50% discount to customers, you will only make $50. After Groupon's 50% cut, you only get $25 for something you normally would charge $100 for. Depending on what your markup is, it better be more than 400% otherwise you could potentially lose money on every transaction! (Added: 20-Dec-2010 Hits: 132 ) Savior Or Enemy? The Many Faces Of Groupon - by Dave Walters While consumers get great deals, the reality is Groupon is a big risk for most small retailers. Having the pricing flexibility doesn't guarantee you can pull off the service side of the equation. In fact, if you have that much open capacity you may be closer to closing doors than you'd like to admit anyway. (Added: 20-Dec-2010 Hits: 147 ) Posies Cafe Groupon in Retrospect (Ouch) - by Posies the purpose of this post was to explain to our loyal customers who visit our little cafe 1) why we would not be accepting Groupons after the expiration date, and 2) share with the consumer how Groupon works for the business, the actual percentage split between Groupon and the business, etc. I take full responsibility for my decision, as you will read in the post below. Please do not attempt to interpret this post as me blaming Groupon or our customers for anything. I am merely sharing the experience. The decision to run a Groupon campaign was my own decision, and one I regret. Lesson learned. And finally, our dear and loyal customer, Lucinda, was taken care of. She is the loyal customer that encouraged me to write this blog post, and for that I thank her. (Added: 20-Dec-2010 Hits: 116 ) Groupon Nightmares (and How to Avoid Them) - by Sarah Jacobsson Purewal The Groupon coupon service is hot right now -- not only with customers who love getting deep discounts, but also with businesses looking to appeal to the site's vast database of potential clients. Groupon and other social-coupon sites (such as BuyWithMe, LivingSocial, SocialBuy, and Tippr) offer deals with a catch: For a deal to become valid, a certain number of people must first purchase it. That way, Groupon makes a certain amount of money, businesses are guaranteed a certain number of customers, and customers get deep discounts. Supposedly it's a win-win-win situation. But small-business owners should be careful not to get swept up in the frenzy of social coupons. As some small businesses have learned the hard way, running a deeply discounted deal can give you so much traffic, and so many customers, that it will cost you money--a lot. (Added: 20-Dec-2010 Hits: 120 ) Groupon 2.0, You Better Believe This Is The Future Of Commerce - by Alexia Tsotsis I don't know if this is genius timing or the opposite (leaning towards the latter), but daily deals site Groupon, which is rumored to be holding a board meeting tomorrow about a possible Google deal, has chosen tonight of all nights to launch its Groupon 2.0 platform which truth be told is pretty farsighted . Everything else aside, the whole concept is extremely smart especially with regards to how we will all probably be shopping in the future, i.e. socially. Taking off on the whole Facebook-initiated user personalization thing, Groupon has launched two new forward thinking features in terms of e-commerce, Groupon Stores and the Deal Feed. (Added: 1-Dec-2010 Hits: 103 ) Groupon, Google, and value on the Internet - by James Surowiecki Groupon's deals are an easy, low-risk way for small businesses to attract new customers. It's an appealing business model, particularly in recessionary times. But is it, as Groupon's C.E.O., Andrew Mason, suggested recently, a company that's going to transform the way local business works? Or is it just another overpriced flash in the pan? The answer, most probably, is neither. Groupon isn't going away. Unlike many Web companies, it's been profitable from the start. (It takes fifty per cent of the revenue in every deal.) This year, it had half a billion dollars in sales, and estimates are that, before long, it could have as much as two billion dollars in revenue. The market for local advertising, which is really the business Groupon is in, is huge (more than $130 billion a year) and still relatively untapped online. And, while Groupon has many competitors, it's by far the biggest and most respected player around. (Added: 20-Dec-2010 Hits: 137 ) Is Groupon a Good Deal for Small Business? - by Paul Chaney It seems everyone is raving over this new merchandising phenomena called group coupon buying from sites like Groupon and its many clones. Groupon, considered by Forbes to be the fastest growing business ever, raised some $170 million in venture capital and is valued as in excess of $1 billion. Not bad for a company only about three years old. I can see the upside to using this approach. It’s a promised land of new foot traffic through a retailer’s door, and the approach has its share of advocates. But, is all that glitters gold? I think not. There is, in fact, a forboding underbelly of liability, and small businesses better be forewarned. (Added: 23-Dec-2010 Hits: 125 )
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