Will Groupon Exist through 2015?

I recently talked with someone who just quit Groupon. He was in sales. He said he needed to get out before the place folds. Why would it fold? He said the business plan is unsustainable. He could get a company to agree to use Groupon once – but that’s it. When he tries to get a business to do the Groupon cycle again, they refuse. That’s because people looking for cheap facials and food are unlikely to be loyal. Businesses usually lose money on Grouponers who will never return. Groupon is supposed to work because, in theory, a business gains exposure by offering a deep discount. In the short-term the business loses money, in the long-term, they gain a loyal customer who eventually becomes profitable. It’s similar to when people talk about a ‘loss leader’.

My friend and many dissatisfied business owners are realizing that many customers trample their business waving their Groupons and then never show their faces again. Now, this doesn’t always happen. I know a woman who loved her first Groupon selling experience. So much so that she expressed her annoyance with their policy that you have to wait so many months before your business can run another Groupon push.

So I have one friend saying Groupon will go bankrupt, another that says the service is fantastic! Is Groupon really that good? What should you as a consumer know about Groupon as we enter 2015?

 

What I’ve Seen as a User

Even just 1 year ago, Groupon was a good resource for finding discounted products and services. But 2014 showed Groupon falling from grace. There are 2 things I’ve noticed that have been happening:

1) The items being sold are poor quality/unheard of brands.

Many of the items sold are from no-name brands. Ordering these products has brought me a myriad of problems: shipping delays, item not as described, lackluster build quality/materials.

2) Groupon isn’t cheap anymore!

Do a simple Google search to make sure the item is actually a good deal. Don’t believe it when they say the item is 40,50,60,70% off. I’ve often found the same items for much less elsewhere.

3) They’ve messed up a lot of my orders.

They once sent me 4 duplicate items and said I could just keep them. Good for me but I think the customer service person just wanted to get off the phone with me.
I can handle no name brands if I’m saving big money – but I’m not. Groupon says items are 30-90% off MSRP and while that may be true, no one buys anything for MSRP anymore. When I see a product listed on Groupon for 50% off, I go to Amazon and it’s cheaper! Apparently, Amazon is giving more than a 50% discount but they don’t share that information. Something seems fishy here. Just recently, I found a cheaper item on Amazon than on Groupon. It seems like Groupon is cooking the numbers.

 

Will Groupon Exist through 2015?

It’s been nearly 3.5 years since Groupon has gone public. And time and time again in quarterly reports, Groupon was shown to be unprofitable. While 2014 ended on a high note for Groupon, most analysts still have a negative outlook. Groupon is trying to survive, though. Instead of just being an email-based seller of ‘group coupons’ they are now trying to become a full-fledged e-commerce site. You may have noticed the site becoming more goods oriented. But Jim Cramer and others still believe Groupon should be a ‘sell’. No one knows for sure if the coupon giant will last another year. On the one hand, the company is technically broke. But on the other hand, there are plenty of businesses still interested in either acquiring Groupon or using Groupon as an end-user. As is reflected in my own life with my anti-Groupon and pro-Groupon friends, Groupon is still anyone’s guess as to its life expectancy.

 

What You Need to Know

The company is doing much poorer than expected; you should pay close attention to what they are doing to earn more money. As for me personally, I unsubscribed to their unrelenting emails (I had to unsubscribe twice for some reason…). After spending 30 minutes searching for Christmas presents on Groupon, I’ve given up on their ‘goods’ section. The items were either underwhelming or overpriced. I believe Groupon was a fad that is now over. If I had any Groupon gift cards, I would be (trying) to use them ASAP.
The article has since been taken down (surprised?) by Forbes but in January, 2014 they published an article saying Groupon would perish in 2014. But will it fade into oblivion in 2015?
Will

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