Groupon Kills Small Business

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A quick look at how Groupon is destroying small business.

Text of Groupon Kills Small Business

  • 1. HOW GROUPON WORKS FORCONSUMERS

2. Two Case StudiesHOW GROUPON WORKS FORSMALL BUSINESSES 3. Eric Hegwer PhotographyConsumers DealRetail Price: $250 Groupon Price: $70Savings: $180 (72% off) 4. Eric Hegwer Photography Erics DealRevenue Split: 60/40 Groupons Share: $42Erics Share: $28 (11% of retail) 5. THE STORY MOST DONT SEE 6. Financial Results Total Retail Value: $35,000 Actual Deal Revenue: $9,800 Groupons Cut: $5,880 Erics Revenue: $3,920 $1307 in 5 days $1307 in 30 days $1306 in 60 days 7. Business Results Photographers Commitment: 210-280 hours 140 1 hour photo sessions, plus minorretouching, plus CD creation Scheduling Nightmare Engagement photos need to be timely Effective Wage:$14-18/hr 8. Reputation ResultsMy fianc and I purchased a grouponfor engagement photos with EricPromises were made but Eric failedto callmy wedding photography istoo important to take a chance that thephotographer might fail to show up. 9. Reputation ResultsI would not recommend EricI hadthe misfortune of hearing about himthrough GrouponThank goodness wecalled the morning of the shoot becausehe had totally forgotten about usOur repeatedphone calls to him have gone unanswered... Ourhopes for engagement photoshave been ruined. 10. Reputation ResultsHe posed us about half the time, saying I know it feelsawkward but it looks great in the photoswhen we didFinally get those pictures, they looked awkwardhe saidhe would email us a link to a website with the photos intwo weeks or lesswhen 4.5 weeks came around andafter multiple unreturned phone calls and emails I emailed himexpressing the unprofessionalism about not returning phone calls andemailsHis not so great photos are not worth his unprofessionalism andunresponsiveness after you employ him. 11. Pier 49 Pizza 12. WHAT THE DATA SHOWS 13. *http://online.wsj.com/article/SB10001424052748703447004575449453225928136.html 14. Groupon Increases Reviews, Destroys Ratings 15. SOME POSITIVE STUFF 16. 6 Cases Where Groupon Can Work1. New Business2. Subscription Model or High Lifetime Value3. Fake Pricing4. Third-Party is Footing the Bill5. Event with Excess Capacity6. Going Broke Anyways