Is GroupOn poised for collapse?
Interesting guest post by Rocky Agrawal for TechCrunch with his thoughts on why GroupOn is poised for collapse.
“Imagine you’re a small business owner. You have to choose between two propositions:
- You can pay $62,500 for marketing. You’ll get a whole lot of customers coming through your door. No guarantees if they will ever come back, but they’ll come once.
- I’ll pay you $21,000. You get $7,000 in about 5 days, another $7,000 in 30 days and the remainder in 60 days. In exchange, you’ll give my customers cheap products for the next year.
I’ve been working on local for a long time and I know it’s hard to get small businesses to spend money on advertising. Really hard. Even getting $200 a month ($2,400 a year) is a high hurdle to meet.” – read the rest of his commentary
Hopefully (and if anyone cares, haha) when I get some more time I’ll write my thoughts and experience with GroupOn and the various daily deal sites. Singapore is saturated with them – over 20+ at my last count. There has got to be a shakeout happening soon… how many discounted spa deals do we really need flooding our inboxes?