Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

40% of Groupon merchants say "never again"

marketingpilgrim.com

Post reply on HN
Print view View original

71–80 of 98 posts

Re: 40% of Groupon merchants say "never again"

#71

Post by pg »

edw519 wrote: post #60
pg wrote: post #56

Earlier quoted context omitted.

Do local retailers really need customer info? I thought the point of Groupon was more to supply the activation energy to transform people into regular customers: to get people in the door the first time to try a business's services or products, so they'd come back later of their own accord.

Do local retailers really need customer info? They do if they want to get them away from Groupon. I have e-commerce customers who love Amazon Merchant because it's cheaper to acquire customers than SEO or buying mailing lists. But nothing pisses them off more than a customer who comes through Amazon a second time, costing them all their profit. They need to save the customer info in order to make the second sale a di…

I don't believe that would be true except for local businesses that are selling a commodity. Those who hope to convert me into a repeat customer based on the quality of their donuts or haircuts will do it after one visit.

Re: 40% of Groupon merchants say "never again"

#72

Post by edw519 »

jrockway wrote: post #65
edw519 wrote: post #25

For a merchant to make effective use of Groupon, he must use it for one purpose: to acquire customers. Once someone comes to you via a third party, you must convert them into your own customer. This generally requires getting their personal info so that you can engage them directly in the future. Amazon merchants have been doing this for years. Pay Amazon their commission for the first sale, then move the name to the…

Does Amazon really take 15%? I hate dealing with store sites directly when I can just go to Amazon, search a bunch of stores at once, and buy what I want with one click. I have a vague idea of who I do business with, but I would never think to search for them directly. So maybe 15% isn't much when you consider how difficult it is to build your own e-store?

So maybe 15% isn't much when you consider how difficult it is to build your own e-store?

15% isn't much when you consider how difficult it is to acquire a customer.

Everyone I've loaded onto Amazon already has their own e-store. But here's what happens...Sales increases 10 to 20% almost instantly. But profits don't because of the 15% commission.

If you have a premium product with a large margin and no e-store, Amazon can be a great way to get orders. Otherwise, Amazon should be used to acquire customers for future direct sales. 15% is just too high for a commodity product.

Re: 40% of Groupon merchants say "never again"

#73

Post by jrockway »

edw519 wrote: post #72
jrockway wrote: post #65

Earlier quoted context omitted.

Does Amazon really take 15%? I hate dealing with store sites directly when I can just go to Amazon, search a bunch of stores at once, and buy what I want with one click. I have a vague idea of who I do business with, but I would never think to search for them directly. So maybe 15% isn't much when you consider how difficult it is to build your own e-store?

So maybe 15% isn't much when you consider how difficult it is to build your own e-store? 15% isn't much when you consider how difficult it is to acquire a customer. Everyone I've loaded onto Amazon already has their own e-store. But here's what happens...Sales increases 10 to 20% almost instantly. But profits don't because of the 15% commission. If you have a premium product with a large margin and no e-store, Amazon…

Interesting. Everyone I've bought from on the Amazon Marketplace has totally failed to "recruit" me as a customer. I typically get a box with what I ordered in it, and maybe an invoice. Nothing asking me to visit their website or anything like that, ever.

Re: 40% of Groupon merchants say "never again"

#74

Post by edw519 »

anonymous245 wrote: post #69
edw519 wrote: post #60

Earlier quoted context omitted.

Do local retailers really need customer info? They do if they want to get them away from Groupon. I have e-commerce customers who love Amazon Merchant because it's cheaper to acquire customers than SEO or buying mailing lists. But nothing pisses them off more than a customer who comes through Amazon a second time, costing them all their profit. They need to save the customer info in order to make the second sale a di…

Interesting. But I don't necessarily agree that all merchants are pissed off. One merchant I bought from had a direct store and an Amazon store. The Amazon store price was higher (by about $1.50 on a $20-ish item), but I still ordered from Amazon because I expected the merchant to take care of Amazon customers better wrt shipping time etc. :) As a buyer, given a choice I would rather order from the Amazon store than…

I think your e-commerce customers just need to raise their Amazon store prices.

Those who sell commodities don't have that option. Every time any of them has tried, sales went into the toilet. You have to stay competitive when Amazon's web page shows your item right next to your competitor's.

Re: 40% of Groupon merchants say "never again"

#76

Post by potatolicious »

Alex3917 wrote: post #3

If 60% of their customers want to participate on a regular basis then that's more than enough to build a billion dollar business. I don't see where the scandal is.

There's another angle to this:

- what type of businesses are Groupon users after? Obviously restaurant coupons are very popular, but why are Groupon users on Groupon?

- what type of businesses benefit most from Groupon's model?

The issue here is that the businesses that present the largest draw for Groupon consumers may not in fact be the businesses that benefit most. In an eventual steady state, businesses that can't make the Groupon model work for them will stop using it, and I have a sneaking suspicion many of these business types are the main reason people are on Groupon to begin with.

Re: 40% of Groupon merchants say "never again"

#77

Post by Jun8 »

singer wrote: post #19
Jun8 wrote: post #7

Earlier quoted context omitted.

It's very different. When was the last time you cut off a coupon from your local newspaper (I don't even know the name of mine -> Google -> Oh, it's Daily Herald, cool!), saved it in your wallet and used it in the store a couple of days later? Groupon's difference is: (i) it's on the internet, fueled with great publicity it has generated (ii) the brilliant social aspect of the groupon system and (iii) the deal is ins…

"I don't even know the name of mine" That's kind of scary. I just got a Sarah Palin flashback. "Groupon is very good at creating hoards of customers; what it lacks, I think, is the consultation that should be provided to businesses about how to limit and handle the crowd." Maybe they just need to allow businesses to put a cap on the number of coupons that are sold? Since a lot of companies are only advertising to the…

:-) I doubt you read your local newspaper with the same zeal as, say, WSJ, Economist, etc. Local newspapers are quite irrelevant unless you are really tied to the community.

I think they already have the cap thing. However, it's not as simple as that. A lot of businesses possess neither the experience nor the theoretical skills to analyze what-if situations involving hundreds or thousands of new customers. When you say the companies are "only" advertising to their local market you are making teh same gross underestimation that some of these poor small businesses do: local can be huge! For example, AFAIK Chicago metro area is around 3M people, when you throw in the suburbs it around 9M. When you advertise to Chicago groupon, all those people have access (e.g. I live 30 mi outside Chicago but still bought the Tall Ship Wendy deal at Navy Pier this summer, they were quite overwhelmed with the demand.)

Re: 40% of Groupon merchants say "never again"

#78

Post by tgriesser »

One thing that I think is ridiculously misleading, is that when watching the video for "how groupon works for busineses"... they have the "we only make money when you make money" premise, and show bags of money piling up on both the business owners side and the groupon rep's side, at what looks to be a 5-1 ratio in the business owner's favor

Now it's pretty clear that in this instance they are talking about when the money is collected from the sold groupons - not the overall economic benefit that the business will see in the future (although it's questionable that even that will be favorable). From the Posies story and finding out that groupon takes at the bare minimum a 50% cut, this video is incredibly deceiving, borderline flat out lying to the business owner from the start... No wonder business owners are disenchanted with the whole process.

Click on "How it works" http://www.grouponworks.com/

Re: 40% of Groupon merchants say "never again"

#79

Post by thaumaturgy »

garply wrote: post #10

I'm a physical goods retailer and I'd like to point out a bit of group-think on HN's part. 3 months ago, I asked you guys if I should use a Groupon clone ( http://news.ycombinator.com/item?id=1490096 ) and I got overwhelmingly positive responses (someone even called my concerns paranoid). Now the place is littered with negative attitudes toward Groupon. I don't think the facts underpinning my worries have changed, on…

For what it's worth, I'm a service provider in the Sacramento area and my tech manager and I are working hard at coming up with an offer that we can provide through Groupon near the end of this year.

I think they're a great, valuable service, despite the large amount of negative press I've read about them recently.

I'm not very interested in trying to convince anyone on HN, though.

Re: 40% of Groupon merchants say "never again"

#80

Post by wiredfool »

singer wrote: post #62
steveklabnik wrote: post #37

Earlier quoted context omitted.

This article would seem to indicate that that's not really the case.

According to the article, less than 32% of the customers visited once. "The 32% that said they didn’t make a profit from the program reported that customers rarely bought more than the coupon deal and few returned to the business at a later date." If over 68% of the customers returned, then I'd call that a huge success.

No, That quote is about the businesses, not the customers.
Post reply on HN