Groupon has no viable business model
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Groupon has no viable business model
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Re: Groupon has no viable business model
#2But as far as an investment goes, Groupon is looking about as profitable as giving away your merchandise for 90% off
Re: Groupon has no viable business model
#3Their business model is profitable, but is it sustainable? How many merchants, after they have tried Groupon, will be likely to use Groupon again for advertising? Not bloodly likely.
Advertisers/merchants keep going back to Google AdWords because they're getting ROI. There's not much ROI from Groupon.
Re: Groupon has no viable business model
#4Despite the fact the author is probably right, his lack of discussing a little company called Amazon makes it hard to take him too seriously.
Re: Groupon has no viable business model
#5Is the business model really so nonviable? Companies are coming to Groupon willing to give them exclusive coupons for their businesses, and Groupon gets to take 50% of the money from every Groupon bought.
I thought the only reason they were unprofitable was the issue of scale -- they were blowing large amounts of money trying to become as big as possible, as fast as possible. Once they are the 500 pound gorilla on the market and the majority of businesses go through them, I can't see them being as bad as they are now.
Re: Groupon has no viable business model
#6Is the business model really so nonviable? Companies are coming to Groupon willing to give them exclusive coupons for their businesses, and Groupon gets to take 50% of the money from every Groupon bought. I thought the only reason they were unprofitable was the issue of scale -- they were blowing large amounts of money trying to become as big as possible, as fast as possible. Once they are the 500 pound gorilla on th…
> Companies are coming to Groupon willing to give them exclusive coupons for their businesses, and Groupon gets to take 50% of the money from every Groupon bought.
Companies are not likely to be willing to give up 75% of revenue all that frequently, and there's a limited number of companies willing to do it even once in any given area.
In Rochester, NY, Groupon seems to have already blown through the low hanging fruit. Now we're getting tooth whitening and batting cage tokens as offers.
Re: Groupon has no viable business model
#7It's interesting that a smart company like Google almost paid $6B for them.
Did they not understand the business model well enough or did they just want it to bolster other services (like payments) despite it not being profitable?
How Google Offers goes should tell us. Maybe they've found a way to make the model work.
Re: Groupon has no viable business model
#8Is the business model really so nonviable? Companies are coming to Groupon willing to give them exclusive coupons for their businesses, and Groupon gets to take 50% of the money from every Groupon bought. I thought the only reason they were unprofitable was the issue of scale -- they were blowing large amounts of money trying to become as big as possible, as fast as possible. Once they are the 500 pound gorilla on th…
It helps if the companies want to come back again.
Re: Groupon has no viable business model
#9Their business model is profitable, but is it sustainable? How many merchants, after they have tried Groupon, will be likely to use Groupon again for advertising? Not bloodly likely. Advertisers/merchants keep going back to Google AdWords because they're getting ROI. There's not much ROI from Groupon.
"Their business model is profitable"
Dwight Schrute: False, they are losing $ [unless you don't count marketing ;-)].
Re: Groupon has no viable business model
#10I think such finance practices are deceitful and shouldn't be allowed.
But re: biz model viability, remember it did take Amazon seven years to turn in a profit. Everyone was nervous, but Bezos was determined to build brand reputation before making money.
Maybe that's what Groupon is doing too.