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It keeps surprising me that Groupon still find merchants given their current revenue share. Most deals are 50%, the share is 50% of 50% - 2.5% for credit card f

It keeps surprising me that Groupon still find merchants given their current revenue share. Most deals are 50%, the share is 50% of 50% - 2.5% for credit card fee processing leaving the merchant with 22.5% of the original price. If you sell anything that you buy, you'd need to have a 77.5% profit. Most restaurants only do a 10 to 20% benefit usually. They'd be better served by pinning a huge promotion on their front like :'50% percent on friday'; they'd reach more customers in they neighbourhood, who would be more likely to come back and they'd keep a much better share of the deal. It's not even nice for your actual customers who come the same day and pay the full price just to discover that they got screwed because they could have paid half by going to groupon.

gergles 15y ago
> It's not even nice for your actual customers who come the same day and pay the full price just to discover that they got screwed because they could have paid half by going to groupon. Precisely. I went to a burger place in SF the other day and the line was 20 people deep, all paying with Groupons. The restaurant's price was already relatively high, so I felt annoyed at having missed out (even though I was planning on eating there anyway.) I think it may be detrimental to run ridiculous coupon deals ever -- if you have ever given away (or basically given away) your product, then people that know about that recalibrate the 'real cost' of it to that. This is especially true, I'd wager, in places that 'seem like' they should have a high margin anyway (like tours, or spas, or other more service-oriented places.)