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How not to use a deal site (as a merchant)

22/11/2011 | Matthew Robins

I was very struck by the tone and content of an article in the Daily Mail today:

Cupcake calamity: GroupOn discount deal leaves baker swamped by orders for 102,000 CAKES and wipes out her profits http://bit.ly/tYdGyY

Three comments in particular I wanted to share about this story.

Firstly, the cup cake maker was incredibly naive to price her offer so low, and to underestimate the volume of orders that such a national offer would generate on the world’s biggest daily deal site. (Unless she did it all for the chance of a big splash in the Daily Mail, of course…)

Secondly, stories like this only reinforce the perception that Groupon and sites like it are dangerous for merchants, especially small businesses. Groupon should be doing more to make sure its incredible effectiveness at generating sales can’t cripple its merchants’ businesses.

Thirdly… can’t you just smell the Daily Mail’s glee at having such a dramatic tale of woe to tell about a small business’ experience with one of these nasty deal sites? Subtext: just pay us £XXXXX for a good old-fashioned newspaper ad (pleeeese) and we guarantee that you won’t get swamped with business… The trad media are terrified of deal sites. Don’t expect to read anything good about them in your favourite newspaper any time soon!