tag:blogger.com,1999:blog-11222355.post4236940716626025463..comments2023-08-09T06:42:11.278-04:00Comments on ScLoHo's Collective Wisdom: GrouponingScLoHo (Scott Howard)http://www.blogger.com/profile/06845134204599222869noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-11222355.post-72625192193007241412010-09-20T12:32:13.617-04:002010-09-20T12:32:13.617-04:00Really this is not much different from retailers w...Really this is not much different from retailers who use direct mail or newspaper ads with coupons as a way to get people to come in and buy.<br /><br />Most retailers I've talked to over the years don't want to play the price game but they do it anyway.<br /><br />The price game works like this:<br /><br />Suggested retail price: $100.00<br />Actual wholesale price paid for by store owner: $33.00.<br />50% off sale lowers the price to $50.00 leaving a $17.00 profit.<br /><br />Margins are higher in some situations and lower in others.<br /><br />It costs money to have inventory on the shelves and empty tables in a restaurant. Groupon is using the power of the web to move the price discount selling plan into the present day.ScLoHo (Scott Howard)https://www.blogger.com/profile/06845134204599222869noreply@blogger.comtag:blogger.com,1999:blog-11222355.post-24886340481802093092010-09-20T12:08:46.797-04:002010-09-20T12:08:46.797-04:00I think there has been a lot of negative backlash ...I think there has been a lot of negative backlash (justified) from merchants about using Groupon and I think rightfully so. Many places have worked with other places doing similar things and giving a similar deal (restaurants.com comes to mind) but they don't take the same level of fees (50% is what groupon gets) so the deal works better for the establishment. While it seems great to have 1000+ people buy your deal, when it's at a loss and mostly bargain hunters and not people looking to become loyal customers then this loss doesn't really justify itself. I think we will see a lot more people coming forward with how this didn't work for them, and those that thought it did maybe waking up to it. <br /><br />Eventually this site will only have deals for things that noone really cares about similar to other sites like it in the past. It will be all places that have little/no cost by bringing in the extra people. Golf courses, city tours, shows that don't consistently sell out are the kinds of things we will see there and not the restaurant and tangible products will be seen less and less frequently.<br /><br />Better sell now at this valuation before the others eat up their lunch with their high fees and current positive look.RipSUphttps://www.blogger.com/profile/13752789301109026302noreply@blogger.com