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The Best Groupon Deal Ever: 86.2% Off On GRPN at NASDAQ
- hkmurakami 14y agoNote: Goods may be damaged
- npguy 14y agoAnd .. No money back :-)
- nekojima 14y agoIs this one of those Groupon deals you only buy once because either, you realize it wasn't worth it, or a few weeks later its on again even cheaper?
- cdjarrell 14y agoGreat title. Seriously though what type of barriers do you think they could have put up? Exclusive deals?
- npguy 14y agoThey must have gone lighter on the margins with the merchants and locked them in. One example I can think of, is to have merchants accept Groupon coins, like Bitcoins, and make people gain Groupon coins elsewhere.
- ronyeh 14y agoClever title. I will write a note to myself that if I am ever offered ~$6 billion for a startup I create, that I will happily take the offer.
- mattmaroon 14y agoPoor bayesian thinking. Facebook was probably offered similar amounts. And Google. If you're offered $6b for a startup there's probably a 50% shot you're worth much more.
- blahzo 14y agoDude... $6 billion. How much more can you possibly need?
- MDS100 14y agoMore.
- mattmaroon 14y agoIf that were the case you'd accept $10 million. The thing is you don't need it, but your VCs do. And if your startup is worth $6 billion, you've probably taken enough off the table that you don't even need that. So at that point why not just maximize?
- ceejayoz 14y agoThere's a lot of speculation that the deal fell apart because Groupon's business was rotten deep down, and that Google either had already realized this or was about to have to be told. I suspect with the accounting irregularities and the stuff I see lately as deals - laser eye surgery? toenail fungus removal? - that the $6B would never have gone through.
- K2h 14y agoThe laser eye surgery I received through a deal was first rate. I felt I got a steal for the price I paid and the excellent care. The merchant talked me out of purchasing through Groupon when I called for details and honored the coupon price after I had the free screening. Everyone 'won' but Groupon
- sjg007 14y agoThat's interesting since they doubled there money not paying Groupon, but still getting the customer.
- K2h 14y agoIt was an interesting sales pitch - they said something like 'it can take awhile to get the money refunded from groupon (1 month) if you don't pass the screening, but it is very unlikely you are not a candidate - you can pay through Groupon and get full refund if things don't work out, or you can pay at the front desk'. I chose the front desk as easier all the way around. I was shocked that the dollar amount I was quoted included tax (I'm in California). As for cost/profit - it sounds like base cost in the facility is around $300 / eye, as this is what I was quoted as a 'redo' if it wasn't working well at the 6 month period. so $1800 - $600 = alot of 'profit' from a customer. the overhead for groupon rate seems negligible compared to the cost of acquiring new customers.
- robertocr 14y agoThis title is pure genius! Enough said.
- npguy 14y agoThanks ! Glad a lot of people liked the title !
- michaelkscott 14y agoI can't stop laughing at that great title. Seriously.
- leak 14y agoI've used Groupon many times to get deals. I know the majority of the costs are in acquiring new merchants and that's probably why they're hurting so bad. Why hasn't someone setup a site that allows merchants to do deals without the need for a huge sales team? If merchants can login and just do a deal, wouldn't that take away a lot of Groupon overhead is spent on?
- rbn 14y agoI had an idea of Reddit style local deals. Merchant submits deal to their local section, when people buy the deal it would rise in the section.
- mpeg 14y agobetter yet, reddit + kickstarter you don't have to buy the deal to make it rise, just pledge to it; then when a minimum pledges are made it goes frontpage where the rank is determined by further buys
- suresk 14y agoI would assume that Groupon could build something like that tomorrow, if they really wanted to. However, the overhead isn't necessarily in the process of creating a deal - it is in finding local merchants and convincing them to give you a big cut of already-reduced prices on things in return for more customers. Sales and customer acquisition are usually a lot harder (and more expensive) than throwing up a website and hoping customers find it.
- leak 14y agoThey don't necessarily have to have a sales team to convince merchants to put up deals. Maybe advertising can do that. Maybe they can outsource the sales people. Since all they're doing is convincing merchants it's a great idea, it doesn't matter where the call comes from as long as it's representing Groupon. Also, they can do things like yelp does with stickers at merchants places. A lot of places have the "Find us on Yelp" stickers and I doubt Yelp went out to find & convince them to do that. I haven't spent too much time thinking how I could make Groupon better but I don't think it's really that far out there to find a better/cheaper way of acquiring customers.
- robryan 14y agoPrevious threads on Groupon have suggested that the $6 billion dollar Google deal would have never gone through.
- gtani 14y agoHere's a ZNGA funny https://twitter.com/maxticket/status/260825571712458752 https://twitter.com/maxticket/status/260825571712458752
- neya 14y agoDeals are in theory the most attractive segment of a given market. It would be highly enlightening to know as to why Groupon is running at such a loss. The way I see it - Deals are a win for the customer and the merchant (and Groupon too). If that's the case, then why is Groupon struggling so much? Is there a flaw in their strategy that someone can point out? Or, is it so that the Deals space is overlooked by the merchants?? An in-depth analysis would greatly help everyone.
- mrich 14y agoThey seem to have a high acquisition cost for deals. Many merchants have already been burnt by them - they often make a hefty loss, so acquisitions get harder. You could also argue that most of the merchants using Groupon are already businesses on the downturn, so they will only use Groupon once and not see any gain from it since their business was unpopular to begin with, and the only way customers would be somewhat satisfied with the experience is at a price discount the business simply cannot survive on. Perhaps Groupon could do some better segmentation of their users. They must have quite a lot signed up, so why not offer many more deals overall, and each user gets the three deals he is most likely to buy. Also, you take a much smaller portion of the revenue so the business can survive. This way, Groupon would earn more through increased volume (it is kind of unprofessional to send a customer a similar deal six times a month - if I didn't buy it before why waste your reach to show it again to me?) In essence they would be a highly-tailored ad agency getting a small commission on a huge number of sales.
- neya 14y ago>They seem to have a high acquisition cost for deals. Thanks for the reply, I kind of agree with you on that one.
- caffeine5150 14y agoI think part of it is that groupon got started at a time of peak desperation for retailers. They were desperate to try anything. They may still be desperate, but wiser.
- suresk 14y ago
- brennenHN 14y agoThe title of this article is amazing.
- npguy 14y agoThanks! Like I mentioned before, I am glad a lot of people liked the title!
- arbuge 14y agoEvery article and comment I read on this topic seems to assert they're doing badly because they're in a business with "no barriers to entry". Building an email list of millions of people seems like a formidable barrier to entry to me. Particularly so when the CPC cost for anything even vaguely daily-deal related has shot through the roof over the last couple of years and is in the $5-$10 range per click now. It usually takes several - several tens of clicks to convert to an email subscription, depending on landing page. Not to mention the cost of hiring and organizing thousands of salespeople nationwide. I don't recall precisely, but I believe that LivingSocial & Groupon are still far bigger by market share than the rest of the players put together... that's not what you get in a space where barriers to entry are low.
- marknutter 14y agoSure, it's hard being the first, but after Groupon became popular people started actively looking for other deal sites. It became very easy to throw up a site and gain a lot of traction. I helped one of my clients do just that and they continue to see a lot of traffic to this day.
- arbuge 14y agoHow exactly did you get that traction? Curious as to what I'm missing... doesn't look so easy to me.
- melvinmt 14y agoVerticals and localization. I believe there are 50 Groupon clones in Turkey alone and you can find a deal site in every single niche you can think of.
- omgtehlion 14y agoIn Russia too: everyone (and his dog) makes these sites.
- ngsayjoe 14y ago
- antidoh 14y agoI'm not a merchant, and I've never used a Groupon deal as a consumer. I say that to show how disconnected I am from Groupon. And yet, I hear that merchants often have trouble collecting whatever they're supposed to get from Groupon; they're sort of the PayPal of deals. That rep must not be good for sales.
- jcfrei 14y agoGroupon or rather GRPN might be under a lot of pressure now, because their acquisition costs for new deals is (still) very high and they face tremendous competition all over the globe (esp. from more versed local competitors - you really need to know a local market to create good deals). anyway if groupon stays innovative (for example in terms of their deals creation - eg. using an automated process, rather than cold calling OR creating significant social buzz around a lot of their deals) then I believe in the long term they have one of the most sustainable businesses out there (although with rather low margins)
- eclipticplane 14y agoThe only thing worse than Groupon's business practices with their merchants are the Groupon customers themselves. Groupon coerces local businesses into signing up with ridiculously high discount rates with promises that it's "getting people in the door" -- the gut reaction of the business is to sign up and then maybe some of those people will be repeat customers! Except most Groupon customers only signed up because it was crazy cheap. A bouquet of a dozen roses for $10? They'll buy that. But a regular price bouquet at $40? Nah. Very few will be repeat customers, and likely not enough to cover the loss that Groupon's high discount cost the merchant. Also, Groupon takes anywhere from 40-60% of the deal, plus a "credit card processing fee" that's usually 3-4%. Also, a big mistake (in my experience with Groupon) is that they do not have an API for merchants to use. They should have allowed point of sale developers to integrate with the Groupon redemption system. As it is now, the whole redemption system can be a royal pain for a small business to account for correctly in their POS system.
- potatolicious 14y agoI agree Groupon is a terrible deal for many (most?) businesses, but it's not coercion. Nobody held a gun to these businesses' head and forced them to sign up, nor threatened them, nor anything really. They sold these merchants a fairy tale about repeat customers - a too-good-to-be-true fairy tale that merchants failed to verify on their own, and got burned. Now sufficient people have been burned that many merchants no longer take Groupon seriously. That's fine, and that's the system working as intended. > "They should have allowed point of sale developers to integrate with the Groupon redemption system." This is much, much bigger thing than you suggest. For one thing, most "point of sale systems" at small businesses are cash registers. They don't get firmware updates, much less an internet connection and programmability. For point of sale systems of higher sophistication (a restaurant, say), these systems are highly custom, closed as all hell, and integrating anything into them without the express an dedicated intent of the original vendor is pretty much impossible. This is also why all attempts to disrupt the restaurant reservation/management space have been so far unsuccessful. Integrating web-age software into extreme legacy meatspace systems is pretty much the hardest problem that could be presented to a consumer internet company. Groupon can pull every engineer they have into this, chew on it for 2 years, and barely make a dent. Hilariously enough, the feature you're talking about is bigger than most companies.
- stevewilhelm 14y agoMy experience with Groupon deals is that they are not targeted to a small enough geographic region. People might be enticed to frequent a merchant outside of their normal shopping area to take advantage of a deep discount, but very few will permanently expand their shopping area. I suspect most merchants don't see a permanent increase in repeat customers.
- w33ble 14y agoWhy do people insist on correlating poor IPO performance with a company that somehow messed up? We keep seeing this with Zynga and Facebook too. These companies didn't mess up, those that invested in the stock did. I'm not saying Groupon is doing well, but to suggest that they should have just sold to Google here is wrong; they still got their payout (the IPO) and they still have their company to boot.
- mhartl 14y agoThe Schadenfraude is strong in this one.