Groupon Merchant - Promote Your Business (2024)

FAQs

Is Groupon worth it for a small business? ›

Businesses can make money from Groupon, but it's not necessarily a significant profit. This is because you're offering large discounts on your product, and Groupon takes 50% of the revenue you make on each item.

First, you agree to become a Groupon Merchant on their network. They then request that you reduce your product or service price by 40–60%. Groupon sends your deal out to the relevant demographic giving you new customers without paying for Brand Awareness.

With millions of active customers and no upfront costs, this makes Groupon the best way to advertise your business effectively.

While Groupon deals can offer substantial discounts on products and services, there are some potential downsides to consider before making a purchase: Limited Availability: Groupon deals often have limited availability, and once the deal is sold out or expired, you may miss out on the opportunity to use it.

Groupon does not charge any upfront costs for creating and running a campaign on our site. We operate a “pay-as-you-go” model, meaning you only pay for the results, not for the listing.

Some more bad news is Groupon requires that a business discount its services by at least 50% and sometimes up to 90%. 50% goes to the coupon website then the discount takes at least 50% of that. With a $100 product, you would get "at most" $25 and at worst $5. You could even find yourself losing money on the deal.

But unlike traditional marketing platforms which make you pay upfront to host your ad, Groupon covers all the initial costs to set up and promote your deal. You don't pay a thing until after a customer redeems their voucher, and our marketing fee is then deducted from your payout for that transaction.

Groupon has seen a steady decline in income since the second quarter of 2023. The company most recently saw a second quarter loss of 12 million U.S. dollars in 2023. In 2022, the company generated a global revenue of around 599 million U.S. dollars.

Then, when a customer purchases a deal, Groupon takes half of the revenue. This point bears repeating: Groupon takes its 50% cut of every single deal sold—not just one—no matter how many you sell.

Over the past few years, the number of Groupon shoppers has fallen sharply. From nearly 54 million unique customers purchasing at least one offer on the site in the fourth quarter of 2014, this figure shrank to 17.5 million buyers by the second quarter of 2023.

What kinds of businesses are most likely to benefit from using Groupon? ›

Businesses that have high fixed costs, and low variable costs might benefit from the Groupon model. High margin businesses like jewelry where a 75% discount still results in a profit are good candidates. All of the above.

Groupon faced a deluge of competition from other platforms, many of which it acquired. Google's changes to subscription emails dented Groupon's open rates in 2013; in Q3, Groupon reported a $2.6m net loss. The platform struggled to diversify; attempts to offer physical goods faltered.

Despite its impressive revenue growth in the early days, Groupon always struggled with profitability. The high churn rate of merchants, the rise of digital advertising platforms like Google and Facebook, and the unsustainably high fees charged to merchants were among the factors that led to Groupon's downfall.

Groupon popularized the concept of offering deals with a 50% off sales price. For customers, this creates a great situation where they can try out a business's products and services at an otherwise unheard of promotional price.

Not All Deals Are Created Equal

However, beware of inflated retail prices. Just because something is listed on Groupon at a substantial discount doesn't make it a good deal. Customers still need to do their research, compare prices and read reviews to ensure they are spending their money wisely.

If you're a merchant who uses custom pre-generated codes for voucher redemption, such as for event tickets, you'll still be paid by Groupon twice a month. However, you'll be compensated based on the customers who've accessed or viewed the redemption code on their voucher, rather than you marking them as redeemed.