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How have merchants, who participated in a Groupon deal, reacted? I hear merchants are doing quite badly in Groupon deals and it's not what it's made out to be i

How have merchants, who participated in a Groupon deal, reacted? I hear merchants are doing quite badly in Groupon deals and it's not what it's made out to be in terms of immediate and/or future revenue. Any data available?

chunkbot 16y ago
Much like the early days of search, businesses are overpaying for a new form of advertising. Advertisers are willing to pay ridiculous amounts for a Groupon deal, so Groupon's sales force has evolved to exploit this extremely lucrative source of revenue. That's just how it works early on. As the market matures, I believe the price of deals will stabilize at a level that makes it a better value proposition for businesses.
hugh3 16y ago
I know a lot of merchants have been bitten by groupon coupons that turned out to be big money losers for them. But this seems to me more like a teething problem for groupon than a long-term issue. With time the system should mature so that ridiculous coupons aren't getting produced any more.
WillyF 16y ago
I just ate a delicious burger at The Counter in Chicago on a Groupon two days ago. This is noteworthy because I bought 4 Groupons to The Counter last year. In 2009 they sold 5,269 $15 for $30 Groupons. This year they sold 6,932 $10 for $20 Groupons (and I bought 4 again). To me this indicates that some merchants are pretty pleased with Groupon. The lower value Groupon offering this year is probably an attempt to turn more of The Counter's Groupon visits profitable, since going over $20 there is a lot easier than going over $30—especially with two people. It's only one data point, and maybe the people at The Counter are just really dumb, but my guess is that the first Groupon offered positive ROI, and they expect to do even better by tweaking their latest Groupon offer.
- maukdaddy 16y ago
  That explains why it was so damn crowded the other day. I had no idea they had a groupon. For all the Chicago HNers, I highly recommend The Counter for awesome, delicious burgers!
pchristensen 16y ago
Andrew Mason has publicly said (at Startup School and other places) that they have a 97% satisfaction rate from merchants. Groupon clones exist because there's such a long waiting list to be featured that merchants go elsewhere while they're waiting. The fat margin Groupon charges gives the restaurant a lot of editorial and consulting about how to best structure the deal to get maximum exposure, customer satisfaction, and profitability for the merchant. There are anecdotes of unsatisfied businesses but statistically, everyone is winning for now.
danielsoneg 16y ago
Anecdotally, I've heard much negative and not much positive. My regular cafe tried them out and had basically the same reactions I've heard elsewhere: - 50% off coupon + 50% to Groupon = 75% off to the biz. - The customers using Groupon don't translate into repeat customers. - The customers using Groupons get nastier than regular customers - especially those who try to use four coupons in a row.

chunkbot 16y ago

Much like the early days of search, businesses are overpaying for a new form of advertising. Advertisers are willing to pay ridiculous amounts for a Groupon deal, so Groupon's sales force has evolved to exploit this extremely lucrative source of revenue. That's just how it works early on. As the market matures, I believe the price of deals will stabilize at a level that makes it a better value proposition for businesses.

hugh3 16y ago

I know a lot of merchants have been bitten by groupon coupons that turned out to be big money losers for them. But this seems to me more like a teething problem for groupon than a long-term issue. With time the system should mature so that ridiculous coupons aren't getting produced any more.

WillyF 16y ago

I just ate a delicious burger at The Counter in Chicago on a Groupon two days ago. This is noteworthy because I bought 4 Groupons to The Counter last year. In 2009 they sold 5,269 $15 for $30 Groupons. This year they sold 6,932 $10 for $20 Groupons (and I bought 4 again). To me this indicates that some merchants are pretty pleased with Groupon. The lower value Groupon offering this year is probably an attempt to turn more of The Counter's Groupon visits profitable, since going over $20 there is a lot easier than going over $30—especially with two people. It's only one data point, and maybe the people at The Counter are just really dumb, but my guess is that the first Groupon offered positive ROI, and they expect to do even better by tweaking their latest Groupon offer.

maukdaddy 16y ago
That explains why it was so damn crowded the other day. I had no idea they had a groupon. For all the Chicago HNers, I highly recommend The Counter for awesome, delicious burgers!

pchristensen 16y ago

Andrew Mason has publicly said (at Startup School and other places) that they have a 97% satisfaction rate from merchants. Groupon clones exist because there's such a long waiting list to be featured that merchants go elsewhere while they're waiting. The fat margin Groupon charges gives the restaurant a lot of editorial and consulting about how to best structure the deal to get maximum exposure, customer satisfaction, and profitability for the merchant. There are anecdotes of unsatisfied businesses but statistically, everyone is winning for now.

danielsoneg 16y ago

Anecdotally, I've heard much negative and not much positive. My regular cafe tried them out and had basically the same reactions I've heard elsewhere: - 50% off coupon + 50% to Groupon = 75% off to the biz. - The customers using Groupon don't translate into repeat customers. - The customers using Groupons get nastier than regular customers - especially those who try to use four coupons in a row.