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,
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.