Sensible Erection | One bad Groupon experience

Friday, 18 March 2011

quote [ There came a time when we literally could not make payroll because at that point in time we had lost nearly $8,000 with our Groupon campaign. We literally had to take $8,000 out of our personal savings to cover payroll and rent that month. ]

[by f00m@nB@r@7:55pmGMT] [+10 Informative]

Comments

backSLIDER said @ 8:10pm GMT on 18th Mar
Like my father liked to say "there is no free lunch, even when you have a gun and take it from the other guy."

DuncmanG said @ 9:26pm GMT on 18th Mar
Yeah, I had to buy that damn gun. Not cheap, let me tell you.

spazm said @ 9:59pm GMT on 18th Mar
You think that lunch was cheap? The Groupon was 'expired' so I had to pay the full monty!

jackbnimbler said @ 8:22pm GMT on 18th Mar
Wow, Groupon seems to really overcharge the company considering they provide the company very little in actual labor. I suppose for some companies the enhanced exposure is worth the cost. However what it really works out to is you are giving away free product en mass to create publicity.

MmmFiber said @ 8:26pm GMT on 18th Mar
Looks like groupon knows how customers will use the service and tries to assure the business of the opposite.

Also, I had no idea the terms were that bad. Then again there are probably many businesses who can use groupon to enhance their customer base.

maryyugo said @ 8:28pm GMT on 18th Mar [Score:1 Insightful]
Well... I'm no fan of Groupon but that's because most of the stuff they promote is pretty useless or it's inconvenient to take advantage of the offer. But these people simply failed to do the calculations.

A different example is a sailing school and boat rental "club" I know. They're fortunate to get a few dozen new members of the sailing club in a year. They ran a Groupon campaign in which they sold a set of basic sailing lessons for about what they figured it would cost them to provide them, maybe a bit less. They accumulated 600 sales! Sure, they had to plan, schedule and deliver all those lessons while losing money on them. But every one of those students was exposed to the staff, the boats, and the facilities of the sailing club and I bet a significant portion of them purchased (profitable) sail club memberships and spent money renting boats to practice their newly learned skills.

I think what went wrong here is a failure to

rndmnmbr said @ 10:06pm GMT on 18th Mar
Using loss leaders to drive return business is old hat in marketing circles.

anagramophone said @ 11:05pm GMT on 18th Mar [Score:1 Underrated]
THIS COMMENT IS INCOMPLETE WITHOUT ITS ACCOMPANYING IMAGE

f00m@nB@r said @ 5:56am GMT on 20th Mar

lilmookieesquire said @ 8:34pm GMT on 18th Mar
It's kind of shocking she's agree to that. 6 on 13 with a suggestion that customers will "buy a lot more than 13 dollars"? It's a cafe dude. WTF are they going to buy over 13 dollars? I think she was a little too trusting of the groupon sales guy.

lilmookieesquire said @ 8:54pm GMT on 18th Mar [Score:1 Informative]
Their menu: http://posiescafe.com/wp/?page_id=441

foobar said @ 9:35pm GMT on 18th Mar [Score:1 Informative]
I think what he was saying was that customers would buy more than one $13 (for $6)coupon, because Groupon would keep everything if they only spent $6. It sounds like she talked the sales rep down from that ridiculous term.

DuncmanG said @ 10:19pm GMT on 18th Mar
I think what he was saying was that groupon would keep all the $6/groupon that people were spending but the cafe would still make money since people would spend more than $13. So for someone who spent, say, $20, groupon would keep the $6 from the groupon, but the cafe would get $7 since the person spent more than $13.

Even at 50%, though, that means the cafe is giving away $13 worth of food for $3. Even if a person bought $20 worth of food/drink (which seems unlikely - when was the last time you bought that much at a cafe?) they'd still be only get $10 for $20 of merchandise. It does seem like a pretty bad deal.

Milkman666 said @ 10:48pm GMT on 18th Mar
You're banking on retaining a portion of those groupon users as future customers, so one of the problems i guess is finding that magic number of how many groupons you have issued. To little and all you get is one time bargain hunters that just troll groupon assiduously for deals. Too many and you can overwhelm yourself, your staff, and perhaps alienate your long time customers. The biggest mistake i think was getting involved simply because its zeitgesity.

trident900 said @ 12:19am GMT on 19th Mar [Score:2]
See, this "business owner" is banking on people thinking exactly that and being all like "poor business owner :("

Reality is this: Sold $13 worth of retail priced food, for $3.

"Lost" $10 per sale right? Wrong.
After calculating all the costs, any good business is making profit at their prices, otherwise there's no point to opening their doors. Granted, if a business is well established and hard times come by, they can stand to get by on breaking even (as long as a modest salary is calculated in); but it's cheaper for a business owner to either sell, or close down, than to go for an extended amount of time where the business breaks even where the owner isn't making anything, since they can get a better return for their investment of time doing something else.

So lets say they sold $10 "worth" of food that was actually only worth $7 after payroll, overhead, etc.

So lets say they lost $7 for each groupon sold, assuming each groupon sale resulted $0 sale over the $13 value of the coupon (which is simply implausable). That doesn't take into account the fact that NOT EVERY GROUPON WAS REDEEMED... which means that say out of 1000 groupons sold, 900 were redeemed (which is an overly fair estimate, probably lower in actuality). That means that 100 of those groupons sold went unused, which is PURE PROFIT for the company.

That means, not only did they not have to provide any overhead costs, employee costs, advertising costs... nada. They got at the very least, 10% of their groupon sales in profit.

It doesn't surprise me that the business owner didn't divulge the redemption %.

My thoughts are that the business owner's claim of having a loss of $8000 are exaggerated. Doing the math, the most they could've lost is $6,300 on the groupon. That's assuming everything could've turned out the worst it could've turned out:

$13 sales (resulting in $0 cash coming in),
Most groupons being used within the redemption period and,
Their profit margin is extremely low.

Something smells fishy. And I don't like seafood.

Persephone13 said @ 10:49pm GMT on 19th Mar
Considering that Groupon frequently refunds expired Groupons, it's unlikely that they pay out the business for Groupons that aren't used.

gizmodizmo said @ 6:48pm GMT on 20th Mar
You sound like someone who's never worked any intelligent position in retail or service.

The bare minimum markup for the privately run food industry is 66%. That will just barely cover operating costs. For every 10 dollars you spend on food, you need to make 30 dollars on it.

Your argument implies that selling food at base costs will let her float by.

radioelectric said @ 8:42pm GMT on 18th Mar
Is this making the news in the US?

radioelectric said @ 8:42pm GMT on 18th Mar
Oh, apparently it's Australian.

pleaides said @ 11:22pm GMT on 18th Mar
It's been going nuts over here for a week at least.

atter_cob said @ 8:53pm GMT on 18th Mar
I did a follow search for news on this.

--The mother of the bully kid did not think her son should get and apology, rather she wanted her so to apologize to the other kid.

--Both boys were suspended four days for fighting. (Faux News originally reported that only the bullied kid was suspended.)

IMO, that's a reasonable situation. The only thing missing is that the bullied kid should be gracious and also apologize after the bully apologizes.

When I was a kid, in 5th grade I got into a fight and knocked a kid's tooth out. (I also cut my knuckle to the bone on his teeth and needed stitches.) I remember he started it because he liked a girl who liked me. But we both got into huge trouble and had to spend PE sitting together for a month. We ended up being good friends through high school.

bruceski said @ 9:31pm GMT on 18th Mar
My brother and I were bullied a lot in school. As twins it was roulette for the bullies because while I was very passive my brother would blow up. There were a few big fights but I mainly remember one where he snagged the bully on the nose just before a choir concert. Blood everywhere.

I think what's important for kids who fight back in situations like this is for it to be made clear that it's not appropriate, even if understandable. Even if there's no or minimal punishment, there should clearly and deliberately be no reward either.

foobar said @ 9:41pm GMT on 18th Mar [Score:1 Underrated]
Bullshit. They shouldn't have to fight back. We wouldn't accept this behaviour in any other sector of society.

Fine, we can't through a 13 year old boy in jail because he's a flaming, violent douchebag, but there's absolutely no reason we shouldn't be holding his parents criminally responsible for his actions. We would for a dog.

blibblob said @ 10:06pm GMT on 18th Mar
Yeah, we should just leash the kids and then none of this would be a problem *rollseyes*

anagramophone said @ 11:05pm GMT on 18th Mar [Score:1 Underrated]
parents with low culture have children with low culture.

EPT said @ 12:36am GMT on 19th Mar
In general yes, but there are a hell of a lot of 'escape' stories, including many here on SE.

f00m@nB@r said @ 12:58am GMT on 19th Mar
You do realize that kids are independent people with their own personalities?

happiest_sadist said @ 10:10am GMT on 19th Mar [Score:1 Insightful]
The law doesn't.

f00m@nB@r said @ 5:54am GMT on 20th Mar
That doesn't negate the fact that the statement "parents with low culture have children with low culture" is not categorically true.

Besides, I am hard pressed to believe that the law says anything about kids' personalities.

foobar said @ 12:05am GMT on 19th Mar
Most people manage to control their kids just fine without a leash.

blibblob said @ 1:36am GMT on 19th Mar [Score:1 Insightful]
That depends. Kids are individuals, not pets. And some people are just little shits regardless of how you punish them.

theolypse said @ 12:29am GMT on 19th Mar
I expect you to be able to civilize your children more effectively than you can civilize your dog.

EPT said @ 12:36am GMT on 19th Mar
Bullshit? He's making the same point you are - violence is not the answer.

but there's absolutely no reason we shouldn't be holding his parents criminally responsible for his actions
Holding parents criminally responsible for the actions of their kids is so full of fail it's not funny.

bruceski said @ 1:30am GMT on 19th Mar
I think you missed my point. Punish the bully, stop the bullying, and go easy on the bullied kid if he fights back. But make sure you don't reward the bullied kid for fighting back, make it clear that violence should be a last resort.

blibblob said @ 1:39am GMT on 19th Mar
Last resort? In all of my experience it's the only thing that actually makes a fucking difference. It'd be nice if you could tell somebody that you're being bullied and they'll actually be able to do something about it, but I've never seen that happen and a lot of children are evil little fucks.

Naruki said @ 3:42am GMT on 19th Mar
But we don't do that for adults who are bullied and fight back, so why the mixed message?

arctan said @ 3:31pm GMT on 19th Mar
Actually, unless it's a clear-cut case of self-defense -- i.e. you were actually in danger of being robbed, badly injured or killed -- if you take a swing at someone in a public place and it turns into a big fight you're quite likely to get taken in for assault whether or not he was asking for it.

Naruki said @ 1:05pm GMT on 20th Mar
After he punches you, it becomes self-defense. And we praise those who thus defend themselves.

But bruceski thinks we should only do that if they are adults.

kimbo said @ 9:31am GMT on 19th Mar
I used to get bullied a fair bit at school. I always tried to endure it for as long as I could, but a few times in primary school eventually beat up guys who were bullying me... In Japan, after beating up a kid, I was never bullied again. But in Australian primary school, I just got teased as much for being a thug.

In high school, I did a lot of kickboxing/boxing. At the time, the gym was pretty serious that we only fight in the ring. But in year 12, all the cool kids got into boxing, and I gleefully kicked the living shit out of them. And was never bullied again.

Though another mate did the same and had 30 Lebanese with baseball bats turn up at his school the next day.

Um... I guess the moral is that people are cunts when in groups of more than one. Worthless cunts.

kimbo said @ 9:32am GMT on 19th Mar
Oh, and this kid is for 5 minutes a national hero, it seems...

DuncmanG said @ 9:28pm GMT on 18th Mar
penny arcade referenced it. Not really "the news", but then again, I don't watch TV.

f00m@nB@r said @ 9:43pm GMT on 18th Mar [Score:3 Underrated]

spookyliz said @ 11:38pm GMT on 18th Mar
as someone who was picked on a lot in school: fuck. yeah.

Ifrit said @ 1:12am GMT on 19th Mar
I watched it 3 times in a row. It was so awesome. Hopefully that limp stays.

f00m@nB@r said @ 5:27pm GMT on 19th Mar
So, Yahoo's pushing out Webm videos, now, as well.

f00m@nB@r said @ 5:27pm GMT on 19th Mar
erm. s/Yahoo/Youtube/

f00m@nB@r said @ 5:30pm GMT on 19th Mar

Casey Heynes vs Bully by kleksiq

azazel said @ 6:59pm GMT on 19th Mar
I was sitting there thinking "this won't amount to much" and all of a sudden I'm all like "wow."

The video (actually, the kid) is so awesome it literally removed my ability to write proper sentences and not sound like an idiot.

atter_cob said @ 9:12pm GMT on 18th Mar
The woman is dumb because she listened to advice from someone who's interests did not include hers. The sales agent told her "normally we take 100% of the profit".... and based on that she agreed to 50%.

Let's think a bit here... most real businesses have people who's job it is to analyze marketing and sales costs. If they don't suck at their job then they would never agree to a deal like 100% or even 50% of the sales going to Groupon. I'd bet Groupon is lucky to get 20 or 30% and mostly I would think less. But the sales person exaggerates to say 100% and now the woman thinks she got a "deal" by paying only 50%. Later she learns that she was screwed. It's like a used car dealer telling you how the car is a classic and normally he'd charge $40,000 for it, but since he has to make quota this wekk he'll let you have it for $35,000.

** Don't listen to people who can make money by taking it from you!

flat_michael said @ 10:42pm GMT on 18th Mar
yeah, no shit. look before you fucking leap, eh? math is hard!

EPT said @ 12:41am GMT on 19th Mar [Score:1 Underrated]
most real businesses have people who's job it is to analyze marketing and sales costs.

It's a cafe.

Hrairoo said @ 9:16pm GMT on 18th Mar
It took me a good 5 minutes of staring to figure out what the 3rd word in the thumb is.

DuncmanG said @ 11:30pm GMT on 18th Mar
Took me a minute or so to realize that the words in the thumb are mirror images. I thought they were ambigrams (same upside down as rightside up) and now my neck hurts from trying to view them.

anagramophone said @ 6:28am GMT on 20th Mar
it's an amphigram

spookyliz said @ 9:31pm GMT on 18th Mar [Score:1 WTF]
i've heard a few horror stories like this, the worst being a wine bar (i think also in the portland area?): they ran a groupon, got a huge influx of new customers, had to take on new staff to accommodate, ran through their supply of wine, and shut down in two months.

as has already been stated, it comes down to planning ahead. i don't know what the woman in this blog was talking about when she said they couldn't set limits on how many groupons were sold; just recently in my area, a beauty salon had a very limited run (300) of groupons, and i've seen plenty of others advertising "limited quantities available".

foobar said @ 9:49pm GMT on 18th Mar
It seems like she's one of those old-school folks who will pick up the phone to talk to someone rather than do the research on the intertubes. So she got advice that was great (for Groupon) from their sales rep.

foobar said @ 9:47pm GMT on 18th Mar
I think a big part of the problem is that Groupon allows fine print. Sure, that seems like a good idea for the business, but it's just Groupon placating them. No one is going to read beyond the headline, and the business will just end up with pissed off customers if they don't honour the headline.

Groupon can be a good marketing tool, but you have to think it through. You're only going to attract a) highly price-sensitive customers or b) people who already like you enough to watch you announcing a Groupon.

Supreme_Coconut said @ 10:04pm GMT on 18th Mar
I bought a groupon thing a few months ago but still haven't gone. Some breakfast/brunch/lunch place downtown. There's one deal that keeps popping up every few weeks for a dentist exam (groupon sends me e-mails daily). Cleaning, X-ray, and checkup for $59 instead of the usual $259. Definitely grabbing it the next time I see it.

f00m@nB@r said @ 10:19pm GMT on 18th Mar

anagramophone said @ 11:02pm GMT on 18th Mar
live action ponyo!

spookyliz said @ 11:17pm GMT on 18th Mar
thaaaat is, like, one of my worst nightmares come to life.

f00m@nB@r said @ 10:25pm GMT on 18th Mar
hidden rpg in nintendo 3ds

shiney things said @ 10:25pm GMT on 18th Mar [Score:2 Funny]
Restaurant.com has a slightly better set up. After the discount, the customer is required to spend more than the coupons worth. I used on last night, that involved paying $10 for $25 with an addendum of spending at least $35, so really you were paying $20 for $35. If the food hadn't been really horrible, it would have been a decent deal for everyone all around.

Krutz said @ 10:34pm GMT on 18th Mar [Score:2]
NPR (maybe it was 'Marketplace') had a story on this phenomenon. It's not that these business owners are stupid or don't plan ahead. Groupon is a new kind of product, which is presented to them like an ordinary coupon. However, thanks to the internet, the behavior that usually accompanies coupons doesn't apply. In theory, a store puts out a coupon for a discount on something, and if you're interested, you go buy it, and a percentage of those who buy become repeat customers for other goods and services.

Groupon patrons are just out for the next deal, and their efforts are concentrated highly. Therefore, a business will sell lots of discounted offers, but a Groupon user is far less likely to give them repeat business at full price, opting instead to just go with the rest of the swarm to the next deal.

Persephone13 said @ 10:44pm GMT on 19th Mar [Score:1 Underrated]
Turns out this place is right around the corner from my new house. I'll have to make sure to go support them! :)

Transfer said @ 11:26pm GMT on 23rd Mar
My friend Shonee spoke to Groupon about working with his store in Brooklyn earlier this year.

"Groupon came. Groupon saw. Groupon didn't use any lube. We will obviously not be working together going forward. They apparently don't like being called a fistful of arrogant asshats. Strikes me as odd because I'm sure they hear it often."

A month later he posted this gem:
"How come you never see a Groupon for discount bourbon, hand grenades lapdances at The Wiggle Room, But you see 90 million for Twilight audio books, Knitting classes, and Bikram Yoga? I call bullshit. Cool people use the internet too Groupon. Get with it."

So yeah, while the idea is good, the company is apparently not.