

Merchants Can Now Run Their Own Deals On Groupon - ssclafani
http://www.groupon.com/merchants/welcome

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patio11
This is a huge, huge deal for services businesses. Just making it dead simple
to collect revenue online is a win for them. "Send out an email to your
mailing list about $10 off massages, get $500 in your bank account almost
immediately, service the customers who come in with printed coupons."

Back of envelope math: $60 massage, $50 with coupon, $45 revenue for merchant.
Works _outstandingly_ well -- even before you account for the inevitable
breakage.

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unohoo
I agree with you that this can be a great channel for local businesses who
want to sell online.

However, I see a couple of potential issues with this approach.

1) Merchants can offer probably a 5 - 10 % discount (acquisition costs shifted
to discounts), but beyond that I doubt if can be sustained. Margins in most
local businesses are not that big. So, it'd be hard for a restaurant to do a
50% discounted deal for like a month or so.

2) Another potential problem of this approach - how many users will check each
individual merchants store ? People flock to Groupon because there's a new
deal every day. Or in other words, the novelty factor keeps things fresh and
keeps people coming back. If a merchant is offering the same deal for 6 months
via the store, it might not be a big draw for users. This will be completely
contrary to the notion of scarcity and novelty that make groupon's a deal a
day model so successful.

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brandnewlow
I just signed up for an account to poke around. On their "create a deal page"
they taunt merchants not to goof around with their discounts and to offer 50%
or more off. Pretty annoying.

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jbail
Isn't the entire point of Groupon that one merchant per location gets their
day in the sun --- and all the exposure that it brings?

I assume Groupon still takes 50% of the revenue like they do with their deal
of the day. Since you're not enjoying traffic by being the deal of the day,
I'm not sure why any sane businessperson would accept this type of split on
what is a normal e-coupon.

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sparky
This is addressed at the bottom of the linked page:

    
    
      What does it cost?
      Groupon Store: There's no upfront cost. For promoted deals you get 70% of each Groupon sold. For non-promoted deals you get 90% of each Groupon.
    
      Deal of the Day: No upfront fee, you keep 50% of each Groupon sold.
    

Was it widely known that Groupon's cut on deal of the day is 50%? I thought
there was some to-do a few weeks back about them wanting 100% of Groupon
proceeds for some cafe.

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srehnborg
If I remember the story correctly, if the cafe didn't go lower than 50% on the
deal itself, then Groupon would take 100% of the money it generated.

Edit:I found the link.

[http://www.facebook.com/note.php?note_id=443354298928&id...](http://www.facebook.com/note.php?note_id=443354298928&id=700068178&ref=mf)

When the customer pays less than $10, Groupon takes 100%.

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hop
Wonder what the cut Groupon makes on these, doubt it can be 50ish percent like
the deal of the days are. This company almost has a license to print money, I
wonder how long it can last.

~~~
patio11
I'm bullish on the category. Scalable advertising which _actually works_ for
small businesses is, and should be, a license to print money. I might grumble
at the $1,500 I paid Google this month but if they told me they had $15,000 of
traffic on my keywords I'd happily max out my credit card for a few days.

Take a look at the yellow pages: it's unsexy, it works, it is a multi-billion
dollar industry.

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unohoo
Wont this dilute the deal a day buzz ?

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srehnborg
My only guess is that they have so many merchants waiting in the queue that
this is an avenue for these merchants to get their deal out.

The only problem is that for the people buying the groupons. I only try to
limit myself to 1 a week since that it all that I can afford right now. If
more groupons are available, I probably wouldn't buy more unless it was a
killer deal.

~~~
bmelton
But the assumption is that you're more likely to find something of utmost
worthiness to spend your money on than before.

I don't have a particular schedule for my Groupon purchases, but if I see
something convenient (that I would have bought anyway) or cool (that I
wouldn't have bought except for the Groupon -- window purchases, basically,) I
buy them.

This means that in the past month or so, I bought a Groupon for Baltimore
Coffee & Tea, which means I got my $34.95 a pound Kona coffee for roughly $17,
and flying lessons, which is something I've pondered before, but never pulled
the trigger on.

Half off is a fine motivator.

I'd be happy to spend more money with Groupon if there were more interesting
offers being presented, and upping the quantity of those offers is likely to
increase the odds of that happening.

