Groupon rant

[Robin Usagani]

I just cant believe it. Today they have a deal for a session with a local photographer for $69. This includes:
1. 1.5 hour session
2. up to 25 miles drive
3. 15 high res. digital files
4. up to 6 people


So she had 600 of this deal and it will be all sold out by the end of the day.

If I do the math 600*69 = $41,400. I assume she to pay groupon certain cut. I am not sure how much. The she has to pay for gas. And the most ridiculous thing is, she has to put a time slot for 600 people! The coupon expires it august 2012. I assume she wont be making any more money since she is giving away 15 high res files. Nobody is going to buy prints through her. I wonder if you are the 600th person calling to make an appointment, when is your photo shoot going to be? Next year? Your baby will be a year old by then LOL. Can someone explain to me what is going on here?

Here is the ad
http://www.groupon.com/denver/deals/ashley-henry-photographyhttp://usagani.com/TEMP/_ Groupon Denver.pdf

 

[Christie Photo]

I did some more math.

IF (and that's a HUGE if) the average time spent per customer is just three hours, then that's 1,800 hours. I figure this is working pretty lean when considering travel to and from the 90 minute session and post processing.

That's a bunch of work for $23/hour. And, as I said, it will likely require more time. The IRS will want theirs.

Spending 40 hours/week on this project alone will fill the calendar for the year.

Wow.

-Pete

 

[Mitica100]

The way groupon works is by selling a certain number of coupons. If they do that, then the deal goes through. However, the seller has to substantially discount their products/services, as it was in this case. The problem with then is that they are not a reliable company. They asked me to do a deal with them at my coffee shop over a year ago and I'm still waiting their reply. LOL

 

[Robin Usagani]

UPDATED.. ADDED THE PDF OF THE AD!

 

[Helen B]

Isn't the Groupon percentage somewhere between 30% and 50%?

 

[Mitica100]

Isn't the Groupon percentage somewhere between 30% and 50%?

Yes, sometimes even higher.

 

[eilla05]

Wow. I could not imagine.

 

[Robin Usagani]

so if you assume groupon takes 40%, that means she will make 24000 in a day! But then she is commited to do 600 photo shoots in the next 2 years.. is it worth it? LOL

 

[Mitica100]

No, I sorry for the misunderstanding, I merely confused y'all... The 40-60% off coupons are sometimes at even higher percentages, such as 75% off.

Groupon sells for example a food coupon at a restaurant for $10.00 and it's worth actually about $20.00, which is 50% off. If a certain number of people buy this coupon by a certain date, then the coupon becomes active, if not, the customers are not charged. Once bought, the coupon is redeemable within a certain period of time, usually a month or more, after which they become void. When someone buys a coupon for $10.00, then they can consume goods worth $20.00 for it and they pay whatever else goes over $20.00. Groupon makes some money, which they will share with the seller. Say they make $10.00 from each coupon sold, then they give $5.00 back to the seller per each coupon and retain the other $5.00. It's a win-win situation, except that they are not that reliable. I tried to work with them about a year ago, I sent in my acceptance and all that was needed and it never showed up on the web.

 

[Jayce]

I think you guys are SERIOUSLY overestimating how many people will actually utilize their Groupon after buying one. I would imagine >50% will go unused.

 

[Mitica100]

I think you guys are SERIOUSLY overestimating how many people will actually utilize their Groupon after buying one. I would imagine >50% will go unused.

Huh? Clarify that for me, I didn't quite understand it. Thx.

 

[Jayce]

I think you guys are SERIOUSLY overestimating how many people will actually utilize their Groupon after buying one. I would imagine >50% will go unused.

Huh? Clarify that for me, I didn't quite understand it. Thx.

The majority of Groupon purchases are impulse based. People say "that looks like a good deal", they buy the offer, and don't consider the logistics of actually using it, like scheduling a time, getting the family all prettied up, etc.

Personally, if Groupon would let you limit sales to 50 or 100 units, I think it would be a great marketing technique. As it stands now, however, it's just too much. Even if only 1/4 of the buyers use their coupon, it's WAY too much.

 

[Mitica100]

Ahha! Yeah, that makes sense. Groupon will give back $$ to the business for the coupons used. The ones not used, well... You know... money earned by Groupon!!!

I was one of these users, I bought a $10.00 coupon worth $25.00 at a pretty good Italian Restaurant, I went there and used it within a week. I'm sure about 25% of the sold coupons get used, the rest go in Groupon's pocket.

 

[el_shorty]

A photography studio in Vancouver did something similar last month.
Their deal was
-a one hour session
-15 image disc
-five 8x10s
all for C$59, and they sold 1332 of those packages.
You can read more here, and you can see the Groupon page here

 

[Robin Usagani]

^^^^ Thats even worse.. but at least he provides only "low resolution" so there will still be a chance someone buys large prints for more money LOL. 1300+ session in the next 2 years! That is madness!