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Red Tape - Not all coupons you buy online are honored by merchants
Edgar Dworsky walked into Rose's Chinese Restaurant in Waltham, Mass., last week with a $6 coupon he’d purchased for $3 and found out the hard way that not everything is what it seems online. The online coupon category is getting more crowded daily. Led by giants Groupon and Living Social, there are now hundreds of smaller competitors. But not every email offering a discount is a good deal. Dworsky purchased his coupon from MobileSpinach.com in early February. But when he went into Rose’s, the owner said he’d never heard of MobileSpinach and didn’t plan to honor it.
According to a new report from Daily Deal Media, a great source of news, information and data about the hot daily deal industry, there’s a whole lot of consolidation and death going on among the many Groupon wannabes on this planet – at least in some regions. Daily Deal Media is keeping most of the good stuff behind a steep paywall, but shared some key findings from its report in a press release earlier this morning. According to them, the world has lost close to 800 – 798 to be precise – daily deal sites in the second half of 2011. In Asia, particularly, daily deal sites seem to come and go at a tremendously rapid pace. According to Daily Deal Media, 1,348 Asian daily deal sites vanished in the last 6 months of 2011 alone. However, in the same timeframe, 324 new daily deal sites sprung up in Latin America (+27.5 percent) and another 235 in Europe (+15.7 percent).
Report: 798 Daily Deal Sites Folded In The Last 6 Months Of 2011 | TechCrunch
Schedulicity
BOZEMAN, MT (July 18, 2011) - Schedulicity ( www.schedulicity.com ), the leader in online appointment scheduling for small businesses, today unveiled Deal Manager, a new, first of its kind scheduling service that allows appointment-dependent businesses to define the maximum number of appointments that can be generated over the lifespan of a given promotion and configure how many promotional appointments will be accepted per day or for the entire duration of the deal. Deal Manager was created directly in response to the proliferation of daily deal companies and the potential challenges they pose to small businesses. Many service providers are inundated with discounted appointment calls after partnering with a daily deal site, particularly at the beginning or end of a deal cycle. As a result, discounted appointments will often cannibalize full-priced services and inconvenience loyal existing customers and potential full priced walk-ins.More Bad News For Groupon: Sales Team Files Class-Action Suit | paidContent
Earlier this week came reports that the daily-deals site, suddenly unpopular with both users and investors, is considering shelving its long-expected IPO. Now comes more bad news—Groupon’s own employees have filed a class-action suit against the company. In a filing in Chicago federal court this week, former salesperson Ranita Dailey confirmed she will be lead plaintiff on behalf of Groupon employees who seek to recoup overtime that the company allegedly failed to pay.
One observation is that SG&A costs are substantial. 66%-84% of gross profit, given the other substantial costs in the business like marketing, is significant. An important question is what the level of SG&A is on an ongoing basis. Another observation is that the performance per sales person is high. Assuming a 40% gross profit rate (recall gross profit as used in Groupon terminology is merchant commission) as a % of revenues (to cut the difference between 2010 and 1Q 2011), each salesperson, based on 1Q 2011 performance (each bringing in $172000 revenue a month), has been bringing in $68,800 in gross profit a month, or $825,600 a year. I have no idea what all-in-costs for a salesperson are, but if it’s $100,000 or 12% of gross profit, this leaves a healthy margin. (It also raises the question, given that SG&A costs are so much higher (i.e. between 66-84%), whether salesperson compensation is really the driver of the high SG&A costs.)
Groupon S1 (IPO): The Importance of Untangling Statements Regarding SalesForce Efficiency « takingpitches
What’s Wrong with Groupon? « The Baseline Scenario
By James Kwak Groupon plans to go public later this week. According to the latest leaks, things are going well: the IPO valuation, scaled back from $30 billion to about $12 billion, may be raised because of a successful road show. Apparently even after the company conceded that the amount they pay to a merchant does not count as revenue, investors have decided they like what they see. But there is still something fishy about Groupon’s business model.Yipit’s Daily Deal Report: Industry Revenue Dips, Groupon Gains Share, And Travel Deals Take Off | TechCrunch
Yipit , the site that aggregates and recommends daily deals based on users’ locations and interests (and raised $6 million back in June from a host of VCs ), released some interesting trend data today on the daily deals space. Overall, July was not a memorable month for the daily deals industry, though there were a few clear winners, including everyone’s favorite deals site, the big kahuna, Groupon . Based on data collected from over 650 daily deals services, Yipit found that the industry’s total revenue declined in July by 7 percent in North America’s largest markets — in spite of a slight increase in the number of total offers. The data also shows that the number of daily deals sites declined slightly in July, with 38 deals sites closing their doors compared to 36 new sites being launched.
In many respects, Groupon is the ultimate IT petri dish. In two years, it has grown from a company that could be run on a simple spreadsheet to one that needs systems spread across the globe. Meanwhile, Groupon is a greenfield opportunity—there aren’t legacy systems dating back decades. As noted previously , Groupon has bet big on NetSuite to be its system of record and Salesforce.com for its salesforce management.
Groupon: The IT moving parts behind the growth | ZDNet
2 December 2011 | By Brian Tarran US— Groupon’s social media analytics partner Awe.sm has raised $4m in a series A financing round to help expand its team and add features to its performance tracking platform. The company produces a set of APIs that let software developers add performance tracking capabilities to the social features of their websites and online applications. Once installed, Awe.sm says site owners can track which social media posts lead to page views, sign-ups, purchases and other business metrics. Co-founder and CEO Jonathan Strauss ( pictured ) said: “Social marketing is an enormous opportunity for innovation – but companies need tools focused on driving their specific business goals.”