groupon?

[swingchickie]

have any of you had any experience with groupon, or know any scoop about them? i'm looking into possibly doing a promo with them, and am trying to figure out if it's worth it. they've been all over the news lately getting raves about a way for consumers to get good deals on stuff... but i don't know if it's enough of a benefit to the merchant.

i contacted them, and they gave me the basics: 1. i set up a groupon campaign for philly for the hoop website. 2. they send their philly e-mail list a blast-o announcing that Tailspin has a deal (they said it's usually something like 50% off). 3. as long as a certain number of people buy the online coupon (e.g. a threshold of 30 people), on that one day, then everyone gets the deal. if enough people don't go for it, it doesn't happen. 4. groupon gets 50% of my profits for the campaign.

so, here's my issue: if i offer 50% off (which they say is usually what drives people to buy the groupons), and groupon gets half of the profits, then after the cost of the hoop materials i would literally make about $4-5 per hoop. which isn't very appealing to me, especially if a lot sell and then i'm spending all my free time making hoops for people practically for free. i'm wondering if the publicity is worth it. hmmm.

Comments

[babyraven.livejournal.com]

I use Groupon and love it... it's great from a consumer-perspective. Whether it's great for the retailer, eh, I can't say.

How much return business do you typically get? If you only tend to sell one, maybe 2 hoops total per customer, I would guess it's probably not worth it.

[viellen]

Wow, that really doesn't sound worth it for you. Wouldn't you be selling hoops at a loss that way?

Groupon doesn't exist in Vermont so I've never used it. :/

[mrlich.livejournal.com]

Is there any way that you could reduce your costs to help make up for the lower income without decreasing the quality of the hoops? I'm thinking of a 'hoop making party' with some of your friends who might volunteer for a one time 'burst' of hoop making?

I'd be up for it just to see what the process is like.

Of course if I was in your shoes, I would probably be such a quality control nazi that I would be way uncomfortable with the idea of anyone but the pros doing the work. Just trying to think outside the box.

[swingchickie.livejournal.com]

i hear ya. i try to cut costs wherever i can.. like, i order my tape in bulk so that i qualify for a small discount for a large order. with all of that, the cost of advertising is so huge we've been operating at a loss the last 2 years. this year we hope to finally break even.

i'd love for everyone to help make hoops, but you're right, it's partly a control thing. making the hoops is harder than it looks, even after 3 years of doing it there are times where the tape goes so wonky that i start all over again and make a new one for the customer because i can't live with selling them something that has any flaws in it. that said, if you ever want to learn (or at least watch) that'd be cool. :)

[boutell.livejournal.com]

If you are running at a loss now, how in the world would you break even on half-price hoops?

Are you getting as much business as you really want to deal with already, given that you have no interest in farming out the work?

Some faves that might be models for your situation: madebyhank (http://www.etsy.com/shop/madebyhank) (aka my friend Katie Henry) sews all day and sells as much as she can sew. It's become her full-time job, which is awesome. But she doesn't want to sell more than she can sew, and she doesn't want to jack her prices up into the stratosphere. So she just doesn't. Which makes her stuff harder to come by, which ensures it always sells out in like five minutes, which has gotten her crazy press.

As a result her store is always out of everything, so check out her blog (http://www.madebyhank.blogspot.com/) for pictures of the larger bags that really made her reputation.

Another example I like: Sarcone's Bakery here in South Philly. They start baking at stupid-o-clock in the morning, and sometime in the afternoon they sell out. When they sell out, they don't bake more bread, they put a sign in the window that says SOLD OUT. Sometimes that sign goes up at 3:30pm, sometimes it goes up at noon. Whatevah! When they're done they're done. It only adds to their caché.

[occhi-cinesi.livejournal.com]

Groupon sounds good if your product had a higher markup. 50% off is a ton off. Unless your deal was Buy One, Get Second 50% Off.

Have you seen Help a Reporter? www.helpareporter.com

His advertisers offer deals on promos (you could advertise) but his free list is helping small biz's get free press by 'helping a reporter/writer/tv'; you'd be considered an expert if someone is looking for your expertise. Free to sign up, you get 3 emails/day so use an email address for your extra emails; they're good!

Good luck!