1. You don’t get all of the money
Groupon, like most other daily deal sites, takes a cut, often about half of the deal’s value. That means if the customer is paying $20 for $40 worth of food, as the merchant, you only get about $10 per deal sold. “We say ‘about half’ because it really does vary, depending upon the size of the market and how much we expect to sell. It can be slightly more or less than 50 percent,” said Julie Anne Mossler, consumer marketing manager at Groupon in an interview with AOL’s Geoff Williams. However, Groupon negotiates its cut for each and every deal depending on industry and the nature of the deal itself.
2. You do not get paid immediately
As part of the setup, the consumers pay Groupon directly, who subtracts its cut and send the remaining money to you, the merchant. But that doesn’t happen immediately.
3. You can set a cap
Groupon can help you figure out a cap to set on your daily deal in relation to the regular traffic your business receives, turn-over rate and staff. This is to ensure that your business can actually handle all of the new business. This is a well-known fact of the daily deal industry. What you might not realize is that you can set a cap even after the deal goes live.
4. You pay nothing to Groupon, but…
Unlike traditional advertising methods, there is no upfront cost to running a Groupon feature. Groupon makes its money by taking that cut off the deal purchase price. However, there are costs associated with the increased business and deep discounts: extra staff, paying upfront for additional supplies as well as the hit from the discount itself. In addition, your business is on the hook for the entire value of the deal until Groupon sends that check
5. You don’t set the deal date
Groupon decides the exact date your deal runs. Its business FAQ page states: “Groupon reserves the right to feature anything in our pipeline at any time, just in case there are time-sensitive deals that come to our attention at the last minute. We use metrics and past trends to determine the best placement for each feature.” However, the page also states that someone will contact you before your deal is featured on the site.
6. You don’t control the deal text
Groupon’s veritable army of copywriters is famous in the daily deal industry. While this saves you from having to craft your own deal text, this means that Groupon controls what gets put into a deal and what gets left out. However, its business FAQ page encourages merchants to suggest specific points for the deal copy if they want it included.
7. You won’t get email addresses
8. You can rate your customers
Daily deals have often been blamed for lowering a business’ Yelp rating. However, Groupon using a two-way ratings feature that allows merchants to rate their customers. This helps Groupon to identify problem customers, address issues quickly and, if need be, prevent certain customers from receiving Groupon emails.
9. You are legally responsible
According to Groupon’s current Merchant Terms of Service, merchants are legally responsible for the deals offered. Each state has different laws regulating coupons, and merchants are responsible for ensuring that their deals fall within those regulations. Legal issues regarding daily deal sites are a hot topic in the industry right now. Eventually, Groupon might have to shoulder more responsibility, but for now, you’re it.
10. You can create real-time deals
With Groupon’s new Groupon Now feature, you can design a deal to run automatically for a short period of time. You can design these deals so customers come in during the slow times during the day or during the week, instead of them all coming in at one time. You can create these real-time deals yourself on the website, and they go live within 15 minutes.