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I'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 h

by leak 14y ago

I'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 ago
I 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 ago
  better 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 ago
I 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 ago
  They 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.
  - gtd 14y ago
    I would assume that Groupon has thought of most of these ideas, probably years ago, but let's not underestimate the power of the hype cycle. If you are literally the hottest startup in Silicon Valley as they were a couple years ago, the last thing you do is anything that could jeopardize growth. Now that they are public it's a very difficult retreat back to a leaner, more innovative mindset.
brandnewlow 14y ago
They did, years ago. No one used it. I think there's a few reasons: 1. Groupons have to be sold over the phone to merchants in order for Groupon to get the margins and volume it wants. 2. Local merchants just don't have a lot of time to spend learning software and monitoring stats. They can talk to a sales rep over the phone more easily than set up a deal themselves.
- suresk 14y ago
  Another problem is controlling the quality of deals that merchants add. The whole selling point of Groupon (and similar "deal" services that have sprung up) is that they aren't just the run of the mill coupons you get in the mail every week - they are generally big, interesting deals. If Groupon sent you 100 deals every day that were "buy one get one free" or "$1.00 off" or whatever, it wouldn't be very interesting and they'd likely lose a lot of subscribers. So, policing the quality of deals and working with merchants to make sure they are offering a deal that fits with what you are doing is going to be a significant source of overhead no matter what.
  - taf2 14y ago
    sounds like they could use or try similar logic to HN karma, voting etc... to automate some of this... imagine if each purchase of a coupon was a vote and the karma collected by a vendor gave them more freedom in posting new deals...
    - arbuge 14y ago
      not bad... ...the self-serving issue is the big issue though. Local merchants at this point in time still don't do web-based self-serve solutions much or at all. Maybe that will change as the world becomes internet-savvier in general, but it's where we are right now.
- antidoh 14y ago
  Requiring a human employee for individual sales works for Best Buy and McDonalds, where labor is cheap. I wouldn't think that scales to higher cost sales professionals.

by leak 14y ago

rbn 14y ago

I 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 ago
better 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 ago

I 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 ago
They 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.
- gtd 14y ago
  I would assume that Groupon has thought of most of these ideas, probably years ago, but let's not underestimate the power of the hype cycle. If you are literally the hottest startup in Silicon Valley as they were a couple years ago, the last thing you do is anything that could jeopardize growth. Now that they are public it's a very difficult retreat back to a leaner, more innovative mindset.

brandnewlow 14y ago

They did, years ago. No one used it. I think there's a few reasons: 1. Groupons have to be sold over the phone to merchants in order for Groupon to get the margins and volume it wants. 2. Local merchants just don't have a lot of time to spend learning software and monitoring stats. They can talk to a sales rep over the phone more easily than set up a deal themselves.

suresk 14y ago
Another problem is controlling the quality of deals that merchants add. The whole selling point of Groupon (and similar "deal" services that have sprung up) is that they aren't just the run of the mill coupons you get in the mail every week - they are generally big, interesting deals. If Groupon sent you 100 deals every day that were "buy one get one free" or "$1.00 off" or whatever, it wouldn't be very interesting and they'd likely lose a lot of subscribers. So, policing the quality of deals and working with merchants to make sure they are offering a deal that fits with what you are doing is going to be a significant source of overhead no matter what.
- taf2 14y ago
  sounds like they could use or try similar logic to HN karma, voting etc... to automate some of this... imagine if each purchase of a coupon was a vote and the karma collected by a vendor gave them more freedom in posting new deals...
  - arbuge 14y ago
    not bad... ...the self-serving issue is the big issue though. Local merchants at this point in time still don't do web-based self-serve solutions much or at all. Maybe that will change as the world becomes internet-savvier in general, but it's where we are right now.
antidoh 14y ago
Requiring a human employee for individual sales works for Best Buy and McDonalds, where labor is cheap. I wouldn't think that scales to higher cost sales professionals.