GroupOn Business Question

I have a fundamental doubt related to the way GroupOn Deals work…

Lets say there is a Group Buying deal for a cell phone. It says Buy a Coupon. If 20 people buy the coupon you get a 20% discount or something.

Now lets say I buy the coupon and in the stipulated time 20 people are not reached. What happens to the money I pay for the coupon.

Will the coupon be valid if I take it the shop.

Need an explanation…


It’s in their FAQ:

Thanks mate… :slight_smile: That answered all my questions. We are planning to start a groupon site and deciding to buy a groupon clone. Do you have any suggestions. When I googled around I found plenty…

But I would like to know if you have any recommendations…

No, not my area of expertise, sorry.
But maybe someone else can help?

My suggestion would be to make sure you have a viable business coming together. These kinds of sites are saturating the web, so unless you have something new or special, you are the 1000th groupon clone out there.

Even here in Bangkok there was an article in the news today about how there are so many groupon-type sites that it’s getting confusing.

As Sagewing so wisely said, you need a unique value to survive and certainly to thrive in the groupon-clone era…

Here’s a great (and rather sophisticated) article on the profitability to businesses of groupon. If you disect it enough you may just find that new winning formula: is quite good but also expensive.
I saw on forums even free gorupon clone for wordpress or with limited features.
Also with a budget less then 100$ you can get a good groupon clone with all kind of features.

The group buy market is already shaking down. In markets like here in Bangkok, the 10 or so group buy sites are mostly in trouble, with just 2 looking like they’ll survive. This is a very competitive business and will become more so as the model becomes refined.

In the US, the group buy sites are beginning to flounder except for the bigger, more established ones. One exception is Angies List, who is seeing some success with their group offers. But it’s easy to see why - they have a huge advantage with their massive existing user base, highly focused demographic/audience, and well established brand.

If you spend $100 or $100,000 on a groupon clone it won’t really matter. Your success will depend on marketing, strategy, partnerships, advertising, legal, sales, and other such factors. The site isn’t complex.

Great insight from Sagewing, listen to it. Groupon effectively spent millions building their business to launch; thankfully the frontend is fairly simple but if you investigate their backend it’s robust to say the least.

The cost component of this business is actually far less about the application as the sales force behind it. To get deals you need to get businesses and that means calling, negotiating, closing. It’s a battle to get more brands onboard.

I heard a well respected founder turned investor talking the other day about the category and his comment, based on a recent funding he had made, was that there are specific niches that still offer an opportunity to create success. Being late to the game in the main category is near certain death but what deal sites still lack is relevancy outside of their core demographics [something i blogged about a few times you may want to read]. Of course Facebook and Google deals look to change that as well – it’s a dynamic and very fast moving field.

Don’t think about how you clone the mass. Think about what puts you apart and how you reach a group that is not best served by the field leaders today. If you can do that, and you can come out the gate swinging very very very hard you could have something going.

Nuklear I reckon your chances are low to non-existent now, purely because you’re way too late to market…but if you can differentiate yourself you might have a chance, at least in Australia.

How? Well every groupon clone here seems to sell total runoff or seconds junk. I mean space-sucking, second-rate, dump-it-at-Vinnies crap OR stuff that basically ain’t that cheap to begin with (eg. ‘free’ photo sittings’, buy 1 get 2 dinners at some outer-suburban all-you-can eat dive, clothing vacuum storage kits (WTF?), CD storage bins (hello?), ‘discount’ golf days valid Tue-Thu (…great…)). So, in a saturated market, if you’re selling something that’s really much much better than the rubbish out there, you might stand a chance. But remember in Australia, while there’s a good economy, people are spending less and less money on discretionary items ie. group-ons stock in trade.
(I just re-googled groupon in Australia and had all these views confirmed again. Utter sh**t!)

Ted S nailed it: the website is the easy part. To make it really work the owner value add is in being a) a gun negotiator and b) having a supplier contact list an arm long. The few Australian sites I checked (not that main one) looked like they didn’t have either of these two qualities (I mean how hard is it to negotiate a non-existent deal with an Indian restaurant on Tue-Thu nights. Answer: Not very lol).

Good luck with finding that niche!!

Three things that Groupon has going for it that most clones don’t are: (1) name recognition, (2) an extensive mailing list and (3) actual PEOPLE to solicit and screen merchants and their offers.

The third factor is critically important to Groupon’s success. However, Groupon, as big as it is, can’t be everywhere. I think the the key to success will be to focus on building local relationships. The problem is, if you establish your business in a large enough market to make it profitable for you, eventually Groupon is likely to make it into your market.

Based on recent transactions, if you have good people and a good model, they may buy you out. If they don’t, then the loyalty of your merchants, users and employees will be severely tested when they have to choose between you and Groupon.