******: a Cost Efficient Alternative to Groupon.

******: a Cost Efficient Alternative to Groupon.

This is an SEO article I wrote for an online coupon website.

The Problem with Groupon

While most consumers are familiar with major online coupon services such as Sweetjack or Groupon, not many consider the impact of these services on local vendors. Neither do they contemplate the profit margin of the coupon services themselves. Groupon for example, collects a minimum of fifty, and maximum of seventy-five percent of the fee in any given online purchase, leaving a miniscule cut for the people most deserving of the revenue: the vendor.

Brass Tax

To put it another way, for every 10 dollars spent on an online coupon, no more than 5 dollars goes to the provider of the service purchased. It is worth repeating that this is the bare minimum of the revenue Groupon will receive, taking up to $7.50 of the 10 dollars spent (1). With such an imbalanced approach to the online coupon service market, Groupon has left a sizable void in vendor satisfaction. This fact is evident in the shaky confidence in the company’s inflated stock prices (2).

Surely, there could be a similar service that better caters to the needs of the producer, rather than lining the already stacked pockets of an online giant. The attempt to fill this void falls to the smaller yet more committed online coupon services, such as the up-and-coming competitor, ******.

******’s Online Coupon Service

****** contrasts very positively to the Groupon service in several striking instances. Firstly, while Groupon collects up to, an impractical 75 percent, the vendor friendly ****** service never collects more than a $0.99 commission, plus bank fees. So, in a purchase of 10 dollars, $8.42 of the purchase goes to the vendor, with the remaining $1.58 being divided between ****** and the bank, each receiving $0.99 and $0.59, respectively. This is a far better deal than the one Groupon is offering.

Vendor and Customer Accessibility

The e-commerce platform provided by ****** offers greater freedom to customers as well as vendors. The potential consumer can search ******’s comprehensive category tree for deals that follow logical criteria such as location or specific service, rather than having a recommended deal presented daily. Vendors will benefit from the ****** service not only in terms of cost, but also in greater control over coupon terms. Whereas Groupon would set the time and range of the coupon, (i.e. this coupon is available until 6 a.m. on such and such a date) ****** allows the vendor to determine the range of their choice. In the same vein of vendor-friendly service, ****** also allows vendors to create their coupons any time they wish, unlike Groupon’s turn based policy which cycles vendor coupons in waves between three to six months. This sort of freedom leads to greater interactivity between the user and the interface at every level, which is something lacking in the Groupon model.

Groupon Versus ******

•             Groupon determines time and range of discount for vendor. ****** allows vendor to determine time and range of discount.

•             Groupon offers one recommended deal per day and several lesser valued subdeals. ****** allows customer to search for deals based on geographical and service preference.

•             Groupon limits the availability of coupon creation. ****** allows for coupon creation at the vendor’s leisure.

•             Groupon takes no less than 50% and in many cases up to 90% of each purchase. ****** never takes more than $0.99 of any purchase.

Providing Profit Opportunity

One more feature of note for ****** is their dedication to the independent worker. ****** allows for thousands of independent sales reps to earn capital by recruiting merchants to the site, and receiving at least 50% of the $0.99 commission on each ****** sold. This generous provision creates a ground-up mechanism for growth that puts emphasis on individual achievement among contractors. Thus ****** is a true service platform, offering opportunity for profit at every level, while spreading across a wide range of markets.

The Future of Online Coupons

Looking objectively at a side by side comparison of the two services, Groupon and ******, it’s obvious which one creates a better market environment for vendors, consumers, and even employees. While Groupon is a pioneer in its niche market, its policies cater more to its own interests, rather than those of the customer. The top-down model so often espoused in contemporary commerce is destined to fail more by its ethics than anything else. A selfish corporate mentality often leaves room for a better service and a more committed company to flourish even in a saturated market. In this case, that company goes by the name ******. Savvy marketers should make note of it, because it’s certainly a name they will be hearing in the future.

 

 

 

 

 

 

 

Works Cited:

  1. Goltz, Jay. Doing the Math on a Groupon Deal. http://boss.blogs.nytimes.com/2010/11/23/doing-the-math-on-a-groupon-deal/
  2. Sterman, David. Why not to buy Groupon shares. http://seekingalpha.com/article/305498-why-not-to-buy-groupon-shares