Comments on: The future of Groupon’s business model A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 By: traducere daneza Mon, 29 Sep 2014 13:53:27 +0000 layout to get people’s focus,with fair price and original package deal! thanks for visiting store shopping along with us! less costly Longchamp Eiffel Tower Hand bags outlet may be worth you buying!

By: Dealson Sat, 28 Jul 2012 06:10:36 +0000 Agree with Felix, I think another Amazon will be their future, Groupon will be not Groupon, but it can maximise their traffic! Some of their deals have been beaten out by much smaller daily deals websites, like

By: coolcatJ Fri, 09 Dec 2011 20:54:04 +0000 You can’t deny Groupon’s business model however I have found that I receive much better customer support through a competitor called BranchBark – check them out, Nothing wrong with saving people big money during dire economical times in this world!

By: sunnydave Tue, 13 Sep 2011 20:09:54 +0000 I have to wonder how many of these commenters have ever actually run a Groupon deal? I’m guessing zero.

Yes, there are many business owners that lost money on Groupon deals, possibly because they sold more than they expected and couldn’t meet demand, neglected their existing customers or simply suck at customer service or maybe they just made bad business decisions with their pricing…is any of that Groupon’s fault?


Having experienced several successful Groupon deals first hand, I can tell you without a doubt that it can and does work. Maybe not for every business (I agree, many local restaurants will have a hard time pricing or planning effectively), but if you provide a great service or product, price correctly, plan for the up-sell and treat the customers wonderfully, most or them WILL come back.

By: Machev Wed, 31 Aug 2011 16:15:04 +0000 A few days after this was posted, I got Amazon’s daily deal: for $25, I can get $50 worth of foam headgear (“cheeseheads”). I think this is the moment where the Groupon / LivingSocial / etc might have jumped the shark.

By: hypermark Tue, 30 Aug 2011 23:00:31 +0000 The part that I am most dubious about is whether Groupon’s model supports them taking the high chunk of dollars per groupon purchased that they currently are.

If, as suspected, the conversion rate is pretty low for the typical groupon-buying consumer to toggle to a LOYAL customer at a given establishment, then the business that signed up with Groupon will either not be repeat business for Groupon or expect to pay A LOT less for what amounts to a heavily discounted one-time customer.

Having talked to a bunch of friends in food-related and exercise related businesses within San Francisco, they report that the groupon (and Living Social) buyer converts to long-term customer at a pathetically low rate.

True, it’s intoxicating to see the wave of business march through the doors, but hugely expensive to snare it, and a complete buzz kill when it proves illusory.

This is not to suggest that Groupon’s sales force has no value or that it’s mailing list has no value, or even that these issues are unique to Groupon.

It just suggests that rather than finding a way to turn lead to gold, Groupon is selling a promise of delivering gold, but yielding only pennies for dollars, which over the long haul will force margin contraction.

By contrast, I think of Amazon back in the day. For the longest time, people were dubious about Amazon’s path to profitability, but the difference there was that they HAD built a better mousetrap, you could SEE it in terms of customer loyalty, repeat buy patterns and the durability of their relationship with manufacturers.

Are there segments or shining examples where businesses are seeing the long-term durability of what Groupon is selling them? I don’t see it, although conceptually love the category.

By: mfw13 Tue, 30 Aug 2011 01:03:01 +0000 First mover advantage only exists when the product/service/business model is difficult to replicate (Ebay & Amazon, for example), thus making it difficult for competitors to enter the market.

When the product/service/business model can be easily copied the first mover advantage becomes almost negligible because it expires very quickly as competitors enter the market.

By: jtemujinw Mon, 29 Aug 2011 21:07:52 +0000 Felix,

You have to substantiate your first mover claim for any of this to make sense. That claim is mos def spurious, nahmean?

By: 2contango Mon, 29 Aug 2011 20:06:04 +0000 Restaurants lose money on each Groupon customer and hope the exposure will generate return business. So Groupon is essentially a marketing expense for restaurants. As such, it will be judged against other marketing channels in terms of expense per acquired diner. Chain restaurants are good at crunching numbers and they won’t hesitate to drop a channel that isn’t working.

Ultimately Groupon’s real competition are all the other marketing opportunities that restaurant operators have. If Groupon isn’t cost-effective for restaurants, restaurants won’t offer Groupon discounts, and Groupon’s revenues will dry up, regardless of how popular the service is among consumers.

By: inboulder Mon, 29 Aug 2011 16:22:05 +0000 The business model may certainly be profitable (coupon books have been around forever), what people are ignoring is that the barrier to entry into this business is low (competing is easy) and network effects are also not much of a factor (no customer lock-in).

Look at Groupon in light of what it can actually offer long term to justify it’s valuation, there is no real first mover advantage, Wheeler did not ‘discover’ anything, this idea is hundred of years old, and has been tried online hundreds of times, what Groupon has is a ton of cash, once this is gone, well, have you heard of WebVan?