Reply to post: Re: Small Business Killer

Today's Groupon offer to its sacked employees: 100% off your salary

Turtle

Re: Small Business Killer

"Small Business Killer".

Exactly right.

We used to buy groupons when they first started but we pretty soon found out how it works "behind the scenes". It's fair to say that the businesses that got screwed by Groupon often bear some of the culpability for not thinking things through and for being, shall we say, overoptimistic. But they apparently also often very naively relied on Groupon sales-rep dishonesty. For example, the Groupon sales rep might say that (and I'm making up a number here) 90% of all Groupon customers buy goods for more than the voucher is worth, but they won't say that they overspend their vouchers by pennies, not dollars - and that's an actual fact.

So we stopped using them except in cases where the business wouldn't really get hurt. For example, we bought tickets to a river cruise. The marginal cost to the business of our going on the cruise was zero - the cruise line's cost and expenses didn't increase by a single cent and the income they got from us was, for them, pure profit, which they would not have gotten if they hadn't offered the discounts in the first place.

But very businesses that offered Groupons had comparable economics.

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