when is Groupon right for your business

Collective buying sites like Groupon are popping up all over the internet. These sites can translate to amazing value to both the buyer and the seller alike. If you’re not familiar with them, in a nutshell they offer a feature product or service at an unbelievable deal to subscribers who have signed up to learn about promotions in their area. The catch is that the offer only becomes valid if a minimum number of people sign up for it. I’ve advised a few of my clients to promote their wares on Groupon with amazing results.

But collective buying sites are not for every business. Here are a few tips to consider before making your products & services available for bidding:

When Groupon could be right for your business

• You have a local business
• You’re B2C (business to consumer)
• You have the potential to upsell other products and services or you cater to repeat customers
• You can handle a volume of customers
• Your target demographic feels comfortable shopping online (note: Groupon claims their subscribers are savvy, young urbanite, single females, college graduates, $70K income+, socially connected)
• You’re prepared to significantly discount your products or services (i.e. at least 50%)
• You offer something of value to keep customers coming back (after all, your competitor could be offering a great deal a few weeks after yours)

Additional resources

For many small businesses, the thought of significantly discounting their products and services PLUS splitting half of the revenues with Groupon can seem like a losing proposition. This Groupon Sales Calculator can help you determine whether the accounting will work for your business.

For more information on Groupon case studies as well as how specifically it works, visit Grouponworks.com.