What is not explicitly spelled out is that they take 50% of your revenue as a fee for using their service. They collect the money online from prospective customers, send you a check and mail out the coupons automatically. If you look at their faq, they give off the impression that running a Groupon campaign is free. You might have read some Groupon horror stories already, but the reality is that Groupon is extremely expensive. Using Groupon Will Cost Your Business An Arm And A Leg While Groupon might work for a small subset of local businesses, here’s why I don’t think Groupon is a good fit for the majority of small businesses out there.Įditor’s Note: If you are interested in learning how to start your own business, click here to take my FREE 6 day mini course on ecommerce. On the surface, it sounds like a great way to market your business and I was really excited about the idea until I thought about it some more and did some analysis. There are usually huge discounts involved (50% or more) to incentivize buyers and the general idea is that by offering a big discount on your products or services, people will try out your offerings and keep coming back for more. They have an email list of over ten million people and if you contact Groupon to be included on their “deal-of-the-day”, you can get the word out about your business to millions of people you would otherwise never be able to reach. The other day, a friend and I were chatting about our wedding linens business and the topic of Groupon came up in our conversation.įor all of you who are not familiar with Groupon, Groupon is a service that offers a really great deal for a product or service once per day.