Is Groupon changing what people are willing to pay?
Even though it still has its proponents, gone are the days of scissors and coupon clipping around the kitchen table. Now all the best deals arrive in your inbox each day, generally targeted to your postal code.
Regardless of which site you choose, merchants offer a coupon on a city-specific basis that can be redeemed for a product or service, providing a predetermined number of customers buys into the deal. Users identify a deal and then spread information about it to their friends, so that they can collectively buy the item with a volume-based discount.
But will they all last?
There’s no question though that all these blast emails get the restaurant's or spa’s name out in front of thousands of people and can actually get some of them through the doors. But will those bums fill the seats again or will their owners simply flit among other coupon-offering venues?
There's a reason why most group-buy discounts aren't just 10 or 20 per cent off: nobody would bother to buy them otherwise. But what about small businesses that are bullied into offering a steeper discount than they’re comfortable with? Or those that have to staff up to handle unprofitable volume?
What’s your experience with group buying sites? Are you a satisfied regular or have you been burned once too often? As a sponsor, has increased traffic translated into improved profits?
By Gordon Powers, MSN Money