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Perhaps I'm missing something here -- people criticize group deal sites for taking too much of the money in a deal (50% of the revenue). The marginal cost for L
by ericz 14y ago
Perhaps I'm missing something here -- people criticize group deal sites for taking too much of the money in a deal (50% of the revenue). The marginal cost for LivingSocial on this is 0... why aren't they making tons of money? Where has the near $1 billion dollars gone?
- jsankey 14y agoYou're assuming it costs LivingSocial nothing to enlist a new business willing to offer a deal. I'm sure this is a huge cost for them, especially considering this is a "land grab" phase where there is fierce competition from other deal sites.
- tessa_82 14y agoDaily deal sites burn huge amounts of money on online advertising and a massive sales team. People talk about these companies as if they are tech yet there is such a huge people component that does not scale. Groupon at peak had over 7000 sales people which is insane!