[JeremyChase]

I think it is horrible. It shifts blame entirely onto the shop, doesn't explain how it went wrong, isn't clear about what what GroupOn is doing to help this business, and doesn't give any clue how they will avoid this situation in the future.

If I were a small business owner looking to use GroupOn I wouldn't feel comforted by this response in the least.

[trustfundbaby]

My apologies if I sound harsh but have you even read the woman's blog post? The blame belongs entirely with the shop in my opinion. http://www.facebook.com/note.php?note_id=443354298928&id...

Its clear from the writing that she didn't know what she was getting into when she struck a deal, she set her deal at a price point that she could not possibly sustain (against the advice of her husband/business partner) and never once contacted Groupon for help with the situation.

What was Groupon supposed to do? Read her mind?

To be fair, I'm sure going forward Groupon can put up big bright red signs warning sellers that they will send them a ton of customers (the horror!) and that they'd better plan to appropriately deal with it or pick a price point that they can sustain, but the implication in your post that Groupon is somehow at fault for the situation makes steam come out my ears.

edit: looks like they already have something like this for sellers "We responded to those concerns by creating merchant preparation materials, including this video featuring a Groupon merchant who sold 10,000 bagel Groupons in a day:"

[enjo]

But it IS the shops fault. They entered into a bad deal that they apparently didn't have the fundamental business to handle. It was a terrible business move on the shop owners part, but I don't see a single thing that groupon did wrong in this case. It's not their job to audit your business and make sure you can handle it. They're in the business of brokering specials to large groups on behalf of the business. That's it. What further responsibility could they possibly have?

[olefoo]

There is this old fashioned notion that sometimes you put the health and safety of others ahead of your need for immediate profits. That is, you don't sell someone something that they can't afford or that will cause them harm, especially if they there is a serious information asymmetry. If this seems quaint, antiquated and foolish to you; well that would be unfortunate. And it is unfortunate that our national character has changed to the point where we lionize people who became rich selling shady financial instruments, and pushing bad loans. _Caveat emptor_ is a good motto to practice, but taking advantage of those who are deaf to the caveats does not make you good, or right, and it is not a sustainable success.

[trustfundbaby]

> That is, you don't sell someone something that they can't afford or that will cause them harm

Seeing as she negotiated the terms down from Groupon taking 100% commission to 50%, I don't think the Groupon rep could have had an inkling that the woman was the type to be taken advantage of in the manner you're describing.

> And it is unfortunate that our national character has changed to the point where we lionize people who became rich selling shady financial instruments, and pushing bad loans.

Lets not stray into the melodramatic shall we? ... its a step too far to equate Groupon with people pushing bad loans. In 95% of cases or so, the businesses benefit greatly from doing business with Groupon ... they weren't uniformly getting screwed over like case of the punks selling Mortgage Backed Securities and Subprime Mortgage loans.

[megablast]

Sure, it is the shop owners fault, she admitted that.

Still, a partner that drives you out of business is not good to have. This is not good for groupon, they should have done things better, made sure that the owner could afford the deal for one. If margins are that thin, maybe they should be looking at not such a good deal, or no deal at all.

[trustfundbaby]

> This is not good for groupon, they should have done things better, made sure that the owner could afford the deal for one

What do you suggest they should have done differently? Should they have filed her Taxes for her, balanced her books and determined her cashflow before turning her down. Maybe then she would only have written a blog post about how the Groupon people were a bunch of elitist asshats that wouldn't do business with her instead?

> If margins are that thin, maybe they should be looking at not such a good deal, or no deal at all.

I'm sorry but this is arrant nonsense. What is she .... five? She's a business owner for goodness sake ... if she couldn't do the math and see that it wouldn't be beneficial to her business to do a deal with Groupon then how is it Groupon's fault?

[sokoloff]

Many people are casting Groupon as a "partner", not as an advertising vendor, which is all I think they really are.

A partner may understand my business and be in a position to help me improve it. A vendor is not. When I buy yellow pages ads, AdWords, or direct mail postcards, I don't expect my supplier to give me advice on my business. Why should Posie's expect Groupon to give them financial advice?