It's pretty much a brand recognition thing. People recognize Groupon and would more likely be willing to conduct financial transactions through a well-known company. Most people who use the internet everyday like you and I don't care who is presenting the deal. Whether it be Groupon or some other advertising company.
The businesses that are offering the products or services get great recognition and exposure to new customers and would pay more for the better known advertising company, but are also willing to pay other advertising companies to do the same thing as well.
There will be a certain saturation level that will occur and the barrier to entry will rise quickly. One thing to note would be that these coupon advertising companies are bogged down and have long waiting lists.
They don't want to offer too many coupons for the same type of service or product in a given time period so they put businesses on waiting lists.
because otherwise I'm not sure how they're going to protect their concept. I mean, heck, I live in *Idaho* and there's something like four GroupOn competitors. I don't know how they differentiate themselves. I didn't even realize they were the first ones. I don't differentiate between them myself; I just look at the offers (and frankly I haven't even been doing that recently), not at who's providing them.
Just days after reports that Groupon may be putting a hold on its long awaited IPO, the word is out that our favorite coupon king is being sued by its own employees (I’m sure the term “former employees” would apply in this case) over unpaid overtime. The class action suit is being led by one-time sales department employee, Ranita Dailey on behalf of hundreds of Groupon employees, demanding back wages for the past three years plus punitive damages for the non-payment of overtime.
That's part of the trouble of being first to market. If you're going to be first, you have to keep innovating, and not rest on laurels, because there are always going to be competitors waiting in the wings to emerge during your weak moments.
I don't get it. What did they spend almost a billion dollars on? Lawyer fees? Obviously not accounting expenses. It seems like such a simple business model. Set up website, create legal docs. market to businesses and consumers of the targeted businesses.
Obviously there is a cap on the market and there is a low barrier to entry so branding is important to keep a decent market share. What is so difficult?
I mean in one day they sell 100 (certificates) for $100 each totaling $10,000 they take their 50% $5,000 That's just one of several deals in one location.
Are they trying to devalue their company? Are they getting advice from Netflix?
Ivka, you are right. If they are not able to generate enough traffic to their site, I don’t think they can get better revenue. Otherwise they have to go through a tuff cost cutting process. If they are not able to equalize the earnings and revenues, surly they may end up with a debt.
"It might have been the first (big) kid on that block, but it's open to anyone to steal the business."
That's the trouble with being first-to-market. GroupOn may have established the market here, but that doesn't mean it's in the clear. In the meantime others have had the chance to learn from GroupOn's mistakes and seize upon its missed opportunities.
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