

Why I Want Google Offers And The Entire Daily Deals Business To Die - amduser29
http://techcrunch.com/2011/06/11/google-offers-daily-deals-business-die/

======
inmygarage
I think of Daily Deals as equivalent to payday loans.

A lot of small businesses have cash flow issues. Daily deals sites propose to
give extra liquidity in exchange for something your business is already
offering. Seems like a great deal until you realize that the fees are
egregious. And daily deal site fees ARE just as egregious, but they do a
better job of marketing themselves/their fees.

Running a daily deal is great for a lot of businesses, but in many cases the
cost to the business is much, much higher than advertised.

~~~
holdenk
Current daily deals make the cash-flow situation worse for small business.
Public information suggests that the merchants are paid somewhere between 30
to 90 days after the deal has run. While this is normal for B2B relationships,
in the past those merchants were involved in B2C where they were paid up
front.

------
jberryman
I don't need them to die, but the whole daily deal fad annoys me. I feel like
it's making people into boring, decadent, consumerists who can't think of
something fun to do that doesnt involve a monetary transaction.

That's my current pessimistic view at least.

~~~
joeyespo
Yeah, I agree. It was fun at first to try out different places at low cost.
But after doing, I've learned that it's really not a great way to discover
unique experiences. As of late, I've been using an occasional deal as more of
a reprioritization to which new thing I do first. That is, say, a new
restaurant I've already planned on visiting. So it's still nice. But the fad
is getting pretty old.

------
WildUtah
My experience is that I buy a groupon for $10 and then I spend about $25, so
the merchant gets $5 from me and $5 from Groupon for -- usually -- a
restaurant meal for one. The deal gets much better for the restaurant if two
people come to eat.

Meanwhile I get to know a new place, and the server gets a $4-5 tip. That
doesn't really seem to bad for the local merchant who otherwise would never
have grabbed my attention. I bet the salons and day spas that make up most of
the offers (restaurants are second) have ways to up-sell and do even better.

I also wonder if other grouponers are, being mostly new customers, also coming
at low demand times. If you come for a discount at the peak hour, that would
be bad.

Oh, Phil Greenspun has written on his blog about good experiences selling
through Groupon. [http://blogs.law.harvard.edu/philg/2010/03/19/groupon-
market...](http://blogs.law.harvard.edu/philg/2010/03/19/groupon-marketing-
results/)

------
felipemnoa
This article reminds me a lot about the Amazon Android App Store. Amazon is
expanding its reach at the expense of many developers by giving deep discounts
on their apps. Many times the developers agree to temporarily give their apps
for free in the hope of acquiring more customers but what they end up
acquiring is more bad reviews from customers who do not really care about the
product and feel entitled that everything should be for free.

------
edw
As the author of this article does, I explain how Groupon and other daily deal
sites work to anyone who mentions using them. Many people I've told feel
something close to shame for using them — and stop. The people who don't are
the last people in the world a business would want as customers.

------
uast23
>Bad for business

Bad for those who were already profitable and could not make much out of the
deals. Not for those who were alienated in some part of the city and got the
kick-start just because of deals.

>Bad advice

While the link posted by author [http://blog.agrawals.org/2011/06/06/best-
practices-for-busin...](http://blog.agrawals.org/2011/06/06/best-practices-
for-businesses-considering-daily-deals/) gives some great advice, the
allegation on Google asking the merchants to tell their customers about
'Google offer' more and more does sound true.How does the advice for posting
lots and lots of photos and a blog post relate to telling your existing
customers about 'Google offers'!

------
stevenj
If the daily deal model is so bad for small businesses I would think more
would speak up about it.

I've only come across a few "horror" stories so far.

~~~
phlux
Its simple math:

Groupon wants you to give them your product for 75% off, they sell that
product for 50% off and keep 50% of the revenue.

Its fucking retarded. My friends in SF that own lots of businesses refuse to
work with groupon - its a horrible deal.

~~~
Daniel14
I don't think it's really that simple. Here's their business model:

a) The customers sign up for those offers for free, and can buy certain things
for less than the normal price. b) The business owners will lose a percentage
of a sale (they might have never made) and in exchange get new customers to
check out their place (who, if they like it, will come eat there again.)
Instead of spending money on advertising, this is a pretty sure way to get
people visit your restaurant. c) The "coordinator" gets a cut.

So, ideally, it's really a win-win situation for everyone involved. Also, I
don't think it helps to dismiss the whole idea up front as "its fucking
retarded."

------
yanw
If the author is looking to make a point about daily deal services why
reference Google and not the 800 lb gorilla that is Groupon?!

~~~
mattmanser
Because he's disappointed they've entered this market, are also taking big
fees and encouraging daily deal 'best practice' that are actually bad when
running a daily deal.

