Does Sugar not realise that Groupon have had much negative press and rapped knuckles from the ASA for pushing their merchants to offer too many deals?

This was filmed months ago?

It was at least a year ago, when Groupon were in the news for destroying a cupcake business (among others) because they sold too many deals.

Oh they're bringing that up on You're Fired.

From my own experience, Groupon is a very ruthless organisation (also for it´s own employees, who have targets they have to make to survive within the company).

That said, when it works your company can thrive on the business generated from those vouchers (only have to calculate in the 50% which goes the way of sales costs).

The one that caught my attention was last November - co-incidently just after the time Apprentice was being filmed:

Groupon overcooks cupcakes!

I'm pretty sure that was the main OMG! Groupon is EVIL!!! feeding frenzy by the tabloids.

I went into a local restaurant last year and the waiter asked if I had a Groupon (I hadn't). The meal was good but when I searched online for the restaurant + Groupon I found loads of negative reviews saying how small the portions were and how badly presented the food was. They had done a deal with Groupon to sell a cheap meal and clearly couldn't produce good food for the agreed price. I'll happily go back to the restaurant but I doubt if anyone who bought the Groupon deal will.

Her fault for not capping the deal. I don't think you can blame Groupon for that one tbh.

Stayed at a beautiful hotel in Wales and had a seven course tasting menu with matching wines so you’ll not hear me complaining about a Groupon deal.

Depends how they sold the idea.

True but she seemed a bit naive tbh.

I found it interesting that the episode didnt go into how the deals website makes it's money. In the boardroom the team totals were simply given as the revenue generated.

In the case of groupon the website keeps half and the vendor only gets half. so for example in the case of the spa which charges £200, the deal was £99... groupon would make £49.50 comission and the spa would only get £49.50. So in reality the spa is actually discounting their package by 75%

in addition groupon require the vendor to submit the groupon code from each customer who books in and uses their voucher in order to get paid. (groupon holds onto the money you dont just get it when the deal ends) If you buy a voucher but for some reason don't use it, guess who keeps the money!!

That is just for groupon but I expect the website actually in the task is similar and yet they kept these details secret- ie we didnt see the candidates negotiating over % comission and LAS only announced total revenue.

I'm guessing how these websites actually operate was kept a secret because once you realise how little the business is making it devalues the services to the consumer and also whats to stop you not just ringing up the vendor directly to ask them for a similar deal which would cut out the middleman, win win!!

.

Yes, assuming groupon didn't bareface lie about how much money the business would receive from a voucher sale, it's not their fault if the business couldn't sustain it. Maybe their calculator was being strange.

LOL

Moral of the story is, if you sign up for a massive discounted offer, lower your expectations.

That woman charged £26 for 12 cupcakes ........ tells you everything you need to know about her.

There was also a problem with an advertising mix-up over a Christmas grotto and in some reports the grotto owner said that she had never actually signed the Groupon contract.

http://www.theregister.co.uk/2011/12...her_christmas/
http://www.telegraph.co.uk/topics/ch...pon-offer.html

Bear in mind that the salespeople are very, very persuasive. They are hiring many of the ex-Yellow Pages staff who have years of manipulating small business experience.

Surely I can't be the only person who thinks that £26 for 12 cup cakes isn't good value?

I'm sure you could get 12 lovely chocolate muffins for cheaper.

You're not alone, I think anyone who believes £26 for twelve bloody cupcakes is a good deal needs their head examined. I wouldn't pay more than a quid for one!

She did, at 1000 over 6 months.

http://www.forbes.com/sites/timworst...eware-groupon/

It is in Groupons interest to oversell the deal, assuming they have done this. The same happened with a massuer, groupons attitude 'what are you moanng for, these are extra customers' he had agreed to sell 250 1 hour sessions, they sold 400.

Problem is if the business turns them away it is them that looks bad.

£26 was her normal price, i.e. just over £2 per cupcake, which is probably the average price of a cupcake these days. There's a place near me that charges £2.50 per cupcake. I don't understand why, but they're very popular these days and that price is what people are willing to pay.

Her problem was that she went from receiving over £2 per cupcake to getting under 20p per cupcake. She should never have agreed to the deal in the first place.

Please, there is about 10 to 20 pence per cupcake cost ........ so marking it up 1000% doesn't somehow justify it.

She claimed that she lost up to £3 per order. If that's true then she was selling cupcakes for under half what they cost her. As for her normal price, if people thought they were overpriced they just wouldn't buy them. They're hardly an essential item.

Why can't people just make their own cupcakes, it's pretty simple to do? Flour, butter, egg, sugar, mix, bake.

I think it is the fancy, Mr Whippy style, icing that appeals to cake lovers, not the actual rather bland cake. The icing is probably more expensive than the cake.