Groupon’s business model sucks the value out of the local merchants, “the bread and butter of Groupon’s base.” While the daily-deals giant’s pitch is great – merchants pay nothing up front, Groupon takes care of all the work and merchants get paid by Groupon after the promotion is set up – the company’s cut of the money in these deals is where things get bad for merchants. The type of business Groupon “helps” should be benefiting from working with the company, but that’s not the case with restaurants, the company’s biggest category of clients. “In a race to the bottom everyone drowns.” (CNBC)
September 21, 2012
