Groupon, LivingSocial & Social Coupon Sites

Lots of new data coming in about Groupon, LivingSocial & the rest of the Social Coupon Sites.  Like the fact that 40% of Groupon users would never use them again.

On the other hand, Amazon had over $110 Million worth of sales in one day thanks to Groupon or that they invested $176 million.  Or the fact that Google was considering buying them.

Lots of people are saying that they are the next big thing, others that it’s just a fad that is going to disappear soon.

As a business model, these companies have it great.  Their only cost is the website, the coding and set-up of offers (which frankly, would only take 1 person at most) and the cost of acquiring new accounts.  Their take? 15% of each sale – and like 3% or so goes to their gateway services.  So 12%.  A mildly successful coupon site that pushes say 100 $20 coupons just netted itself $300 in revenue, $240 in net not including other services.

The other side? The customers… meh.  Make sure you have a good product or service and you’re off.  Service sector companies would work well especially if you’re launching.  Introducing a new service and ‘filling’ your blank spots are great – ditto on perishable goods.

For non-perishable products – now that’s more debatable.  Would it be worth it? I’m not sure.  Gut feel – probably not.  Certainly not like Groupon; where you have no control over the number of coupons.  The others are more flexible, which allows you to control your cost.

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