Why Groupon Is Poised For Collapse
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Why Groupon Is Poised For Collapse
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Re: Why Groupon Is Poised For Collapse
#2I don't know if it convinces me that Groupon is "poised for collapse", but it certainly exposes several risks in the business model (for Groupon, the merchant, and the consumer), as well as how competitors can take advantage of those.
Re: Why Groupon Is Poised For Collapse
#3I don't know if it convinces me that Groupon is "poised for collapse", but it certainly exposes several risks in the business model (for Groupon, the merchant, and the consumer), as well as how competitors can take advantage of those.
When you look at the $1bil they made last year in funding, and what amount they listed in their IPO paperwork, they certainly look and feel like a ponzi scheme. I hope they are not, but it feels that way. I'm staying as far away from that stock as possible.
Re: Why Groupon Is Poised For Collapse
#4Oh look, another 'Groupon isn't magic' post.
Yes, you have to actually work to maintain those new customers, just like always. In fact, you'll probably have to work a little harder than normal, since their first experience at your business is at a huge discount.
But treat them right and let them know what they're in for and it's no different than other other coupon scheme designed to lure customers in. Oh, except for being a huge buzzword right now and attracting more customers than would normally be possible.
Yes, you heard that right, I'm saying that Groupon can be a really good thing for your business if you jump on now. But ONLY if you have properly prepared for it, and negotiated with Groupon correctly.
Don't let them badger you into a bad deal for your business. You would be better with no deal than a bad deal.
Re: Why Groupon Is Poised For Collapse
#5[deleted]
Re: Why Groupon Is Poised For Collapse
#6I don't know if it convinces me that Groupon is "poised for collapse", but it certainly exposes several risks in the business model (for Groupon, the merchant, and the consumer), as well as how competitors can take advantage of those.
I went in with my metaphorical trigger finger on the "flag" button, but it does seem to add a new and useful perspective that I haven't seen yet. Explaining Groupon as a network of loans makes a lot of sense.
In fact, as someone who has resisted the characterization of Groupon as a "Ponzi scheme" on the grounds that I prefer the term actually mean something specific, this has gone a ways to explaining how that may actually be true. But the interesting scheme isn't so much in the investors, where people have been talking about it, but in the way that businesses are being paid with revenues from the subsequent Groupons, and so on. There's a lot of loan risk in a lot of directions on Groupon's balance sheet. It seems to me they don't have to be off by much for it to crumble. "Collapse" in the title is not just a linkbait word, the author really outlines how the whole thing might very quickly collapse.
Re: Why Groupon Is Poised For Collapse
#7It seems his main point is this:
Google Offers pays merchants faster (80% of the money goes to the merchant right away, vs 33% with Groupon). The OP expects this will force Groupon to make the same deal with merchants, which will change their business model, which will put them out of business. That or Groupon won't change its business model, and Google Offers will run them out of business by virtue of this better deal.
IMHO, going from that small point to "Groupon is poised for collapse" is just a bit hyperbolic.
Re: Why Groupon Is Poised For Collapse
#8Oh look, another 'Groupon isn't magic' post. Yes, you have to actually work to maintain those new customers, just like always. In fact, you'll probably have to work a little harder than normal, since their first experience at your business is at a huge discount. But treat them right and let them know what they're in for and it's no different than other other coupon scheme designed to lure customers in. Oh, except for…
The problem is that there is no guarantee any of those customers are actually new. It appears that in many cases, most are ALREADY your customers and you're simply giving them discounts.
Re: Why Groupon Is Poised For Collapse
#9I don't know if it convinces me that Groupon is "poised for collapse", but it certainly exposes several risks in the business model (for Groupon, the merchant, and the consumer), as well as how competitors can take advantage of those.
Agreed. It's a very insightful article on the pluses and minuses of their business model.
Re: Why Groupon Is Poised For Collapse
#10Oh look, another 'Groupon isn't magic' post. Yes, you have to actually work to maintain those new customers, just like always. In fact, you'll probably have to work a little harder than normal, since their first experience at your business is at a huge discount. But treat them right and let them know what they're in for and it's no different than other other coupon scheme designed to lure customers in. Oh, except for…
The problem is that there is no guarantee any of those customers are actually new. It appears that in many cases, most are ALREADY your customers and you're simply giving them discounts.
That's almost always the case with coupons, though. Sure, you can exclude current customers under some coupon schemes, but you risk alienating them... And losing an existing customer is costly, since you put so much into gaining them in the first place.