Most shops enter into deals with Groupon to reach out to more customers. A cake shop in UK found out that the Groupon swarm effect could also adversely affect their business.
Write David Wilkes for The Mail Online,
Write David Wilkes for The Mail Online,
She offered subscribers to the site a 75 per cent discount on 12 cakes – selling them for £6.50 instead of the usual £26.
Mrs Brown, from Woodley, near Reading, said: ‘We only expected to get a few hundred orders out of it but we had thousands and thousands pouring in. We had to cut it off at 8,500 orders.’
Her company, called Need a Cake, normally employs eight workers, but it had to bring in 25 agency staff. After spending an extra £12,500 on staff and distribution, she made a loss of £2.50 per order.This is an important warning to all, especially to those that have to deliver real physical goods, that it is important to ensure you set a limit to the coupons offered to ensure that your business don't suffer from the promotion.
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