http://techcrunch.com/2011/06/03/why-daily-deals-raw-deal/
QuoteSpecific percentages will vary, but these are rough approximations. A business can't cut prices in half and give half of the rest to someone else and make a profit...
businesses use fake pricing as part of their everyday business
>A business can't cut prices in half and give half of the rest to someone else and make a profit...
Exactly. Nobody can offer their services at those margins for a very long time.
I had read that companies in the US were complaining bitterly about that, but in the UK all I've heard are good reviews from advertisers. Not sure if the model differs, or its in the honeymoon phase, or they've kept a lid on the negative PR.
I have also read that less than 40% of the vouchers paid for are actually taken up, but can't vouch for the accuracy of that (Marketing Week I think)
The other thing which has happened here is Groupon were done by the ASA or someone similar for advertising deal which weren't viable - eg; advertising '60% off' but the only way you could achieve that was to eat at 3pm on a Thursday or something ridiculous, so many of the discounted rates are actually less discounted than they appear.
I guess if you're actually only offering 25% (whatever the ad says) and then only half the vouchers are being used, your'e covering your costs in the worst case. If you offer something downloadable or a service where you can book people into less busy timeslots, its a lot of advertising coverage and not much actual cost. Considering that we pay for clicks on media advertising Groupon could actually be a cheaper way to pay for clicks with the right deal (there's definately a country house hotel in Wales I know about that I didn't before, plus fish pedicures from here to Brighton.....)
I gotta ask ... what's a fish pedicure?
In the UK we still have fish with feet - we have specialist vets that take care of their poor little fishy toes ;)
http://www.bbc.co.uk/news/health-12595809
added:
They also do fish manicures for fish fingers ;)