Groupon IPO Today



groupon i a pretty sweet deal for its users, so it will be around for some time to come.

90% of businesses not rerunning a groupon prmotion again is strange, who knows the reason behin it, I remember some people were complaining on watchdog that a massage company did a groupon deal for 1hr masages at heavily discounted prices. they had so many buyers that they were fully booked for 3 months back to back with bookings at these heavily discounte prices.

they ran out of business because they didnt think it through, groupon wanted a minimum volume before even considering the offer, and the massage company was silly and gave them the volume which they coudnt meet.
 
Yuckystuff said:
Businesses don't rerun them because the terms for the merchant suck ass. Most businesses lose money when they run them and they don't gain new customers since most people using Groupon's are bargain hunters, not loyal customers.
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basically sums it all up.
groupon takes 50% of the cut. they are already discounting their prices by 50% so of course merchants are gonna lose money and not return
 
lol at all the experts. I personally know 3 business owners that made 6,7 and $12k. They will gladly do once or twice a year.

Love how sOme of you talk such a big ass fucking game but don't know shit.
 
Realty is that it's going to cost the business money for the specific deal they run. However it is up to the business to upsell, cross promote their products. Also a lot of business owners, don't treat group buyers the same as their regular customers. No wonder the customers don't come back. Im not saying that all customers are great but if you can pickup returning customers from the deals sold your doing pretty good.

It's gonna cost you 25% of the deal value, but the business is getting customers in the door. Don't forget. The business would have to pay tons for newspaper, magazine or tv marketing and still have no guarantee that they will get any customers.

I don't work for groupon, but i do work in the industry so i see these problems on a day to day.

I think the industry is here to stay but I do certainly question what is going to happen with Groupon. In my opinion they are in trouble as their profit per customer is rapidly declining.
 
The problem in the daily deal space is that there is a minimal barrier to entry. Competitors will always be popping up and they will continue to undercut eachother when it comes to how much of a cut they take. Plus, local competitors are able to dominate their areas if they have reach.

For example, in Vancouver a big media company owns 4 of 5 radio stations in the area. They decided to start a daily deal site. Not only do they hit up people via email, the Radio DJ's are pimping the days deal in between every song.

Fucking brilliant.

So if I'm Chung-Li's Massage Parlor am I going to run a deal with Groupon who takes 50% and only promotes online, or am I going with the local company who only takes 25% and is pimping my shit all day long in between Nicki Minaj songs as people are driving by my shop.

No brainer.

/groupon
 
Paper_Chase said:
The problem in the daily deal space is that there is a minimal barrier to entry. Competitors will always be popping up and they will continue to undercut eachother when it comes to how much of a cut they take. Plus, local competitors are able to dominate their areas if they have reach.

For example, in Vancouver a big media company owns 4 of 5 radio stations in the area. They decided to start a daily deal site. Not only do they hit up people via email, the Radio DJ's are pimping the days deal in between every song.

Fucking brilliant.

So if I'm Chung-Li's Massage Parlor am I going to run a deal with Groupon who takes 50% and only promotes online, or am I going with the local company who only takes 25% and is pimping my shit all day long in between Nicki Minaj songs as people are driving by my shop.

No brainer.

/groupon
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I though that was gold when I first heard them promoting on the radio.

A few weks after I first heard them pushing There daily deal site I got cold called from WagJag for a different business I run. Tried pulling a fast one how they have hundreds of Thousands of people that are ready for them to launch in Vancouver. ( Yes this was pre launch for there Vancouver area ) All Organic from people who want deals. Good sales guy kept trying after I told him that I am in affiliate marketing and I actually at the time was running an from them and that I know how they are getting these emails and what his sales pitch was BS. At one point said he had pull was high up would be able to set the rate I paid... So I asked for a bump on the offer I was running.

I am trying some other forms of localized advertising now, maybe in a few months I may try a smaller site. Maybe ethical deals or something. I see how it fucks up a lot of companies if they don;t structure there deal correctly. I have a few idea's on how to make mine profitable!
 
Show me a business model based on increasing perceived value add so merchants can maintain or even raise prices, not lower them, and then you have a winner.
 
I think the company is over valued. It has to come down once the frenzy is over. Short sell.
 
RedFireGreg said:
I am trying some other forms of localized advertising now, maybe in a few months I may try a smaller site. Maybe ethical deals or something. I see how it fucks up a lot of companies if they don;t structure there deal correctly. I have a few idea's on how to make mine profitable!
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This really isn't that complicated. The key for any business is to cross sell. If you are a restaurant and you know that your average bill is $80 + TIP you put out an offer $15 for $30 which is still a decent deal. You make sure your waiter works his ass off to get the up sells. Of course don't be to forward about it but you know instead of a $30 bottle of wine have him push the upgrade to a $40 bottle.

If your a hair salon doing a cut, offer the customer a die, blower, shampoo, conditioner, treatment, etc to at the very least make a few bucks on each one. That way you don't loose money. You don't make as much as you always do, but you'll have volume and you WILL get returning customers if you do it right.

The model works to get customers in the door. You just need to figure out how to convert those fuckers when they walk in the door.

The problem is tons of businesses are running deals to 'save' their business but reality is in MOST cases it won't for 2 reasons.

1. The deals cost money and the check they get will help them pay their bills this month but not in 3 months when the cost of services start to catch up.

2. The business owners are basically failing at their businesses anyway as that is why they are almost out of business so no matter what kind of advertising you do, if you don't run your business right you will FAIL. These people have no place running a deal in the first place, but unfortunately deal sites don't have a magic ball to know this before the deal runs.
 
nickCR said:
This really isn't that complicated. The key for any business is to cross sell. If you are a restaurant and you know that your average bill is $80 + TIP you put out an offer $15 for $30 which is still a decent deal. You make sure your waiter works his ass off to get the up sells. Of course don't be to forward about it but you know instead of a $30 bottle of wine have him push the upgrade to a $40 bottle.

If your a hair salon doing a cut, offer the customer a die, blower, shampoo, conditioner, treatment, etc to at the very least make a few bucks on each one. That way you don't loose money. You don't make as much as you always do, but you'll have volume and you WILL get returning customers if you do it right.

The model works to get customers in the door. You just need to figure out how to convert those fuckers when they walk in the door.

The problem is tons of businesses are running deals to 'save' their business but reality is in MOST cases it won't for 2 reasons.

1. The deals cost money and the check they get will help them pay their bills this month but not in 3 months when the cost of services start to catch up.

2. The business owners are basically failing at their businesses anyway as that is why they are almost out of business so no matter what kind of advertising you do, if you don't run your business right you will FAIL. These people have no place running a deal in the first place, but unfortunately deal sites don't have a magic ball to know this before the deal runs.
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I agree, which is why I have not jumped into any of these yet. I am doing some advertising with local movie theater. I have it set up that I have an way of seeing if I see results or not. Most of the deals I see are for products or services that the business would be able to make money on if they did not have to pay the groupon fee.
 
pricing isn't as good as I would like, but options trading on Groupon opened this morning.
You can get Jan puts @ 19 for 1.80, could be a good way to make some money betting against this dog while there are still no shares available to short, YMMV.
 
Perfect, from 1.80 to 2.80 in a week, I luv doubling up my money on dogs like Groupon, might be the only way anyone has ever turned a profit with a Groupon deal ;)
 
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