[mattmanser]

I think that perhaps you're not grokking Groupon, the customers of Groupon have never been the bargain hunters, they've always been the merchants. The bargain hunters are the product Groupon sells.

You can then look at the model and realize Groupon have been screwing their own customers.

It's a shame as I think the core concept of the business is pretty sound in my book, but I was astounded when I found out the Groupon were taking 50-100% of deals. Just seemed like short term gain for long term loss. I thought that at least they'd be making crazy profits, but it turns out they're making a loss! That was what truly astonished me. They don't even have any physical good, they're selling other people's products for free and they're making a loss. Jeezus, what a royal screwup.

The discussion of the model here this last day has explained how/why they dug themselves into this terrible hole.

If, and tbh it's still an if, groupon unravels, it'll be quite a few years before this model will surface again. Which is a shame as done in moderation it seems a sound one to me and a win for all involved.

[robertp]

It is the other way around. My friend has a wine store and he was an early adopter of groupon. I think he started almost 2 years ago? He stopped doing it because it brought in riff raff customers that were cheap and were pretty much broke.

[DaveMebs]

No, he got it right. His point was that Groupons customers are merchants, and they have been screwing their customers. Excluding the first sentence, your point completely validates what he was trying to say.

[melvinram]

That's just semantics. There are three parties involved: Groupon, end customers and merchants. It was pretty clear who marciovm123 and I were referring as the customers in the posts.

[AndyNemmity]

It was in no way semantics, and his point was actually very insightful.

[Goladus]

There was some insight that was muddied by the confrontational language, and the semantic ambiguity introduced by marciovm123. There are two interesting issues:

(1) repeat customers to the merchants, which they obtain via groupon.

(2) merchants who use groupon and do repeat business with them.

melvinram was talking about (1), mattmanser was talking about (2).

[rmrm]

"they're selling other people's products" -- as every reseller does. And who do they sell them to? Their customers.

Customers pay you. You pay producer. That makes you a merchant. You get a really, really good price from the producer? And sell it really cheap to your customers? That makes you a discounter.

I know it's 2011 and we live in the future, but it's not a new paradigm, and it hasn't reversed any relationships as we normally think of them. Discounters have existed forever.

[space-monkey]

"That's just semantics."

Exactly. The semantics is what the words actually mean.

[Goladus]

"That's just semantics" is a common way of saying "you're arguing over semantics instead of the point." When arguing semantics is disguised as a genuine rebuttal, it's a fallacy.

If I say the sky is blue, and you assert the sky has no color, you're not actually contradicting my assertion you're disagreeing about the meaning of the word 'sky'. That's arguing semantics instead of addressing the point.

[melvinram]

Yes, by "that's just semantics", I meant that it doesn't matter which party you call the customer. The thrust of the argument is still that Groupon is screwing over merchants and that I'm not convinced that merchants will continue to work with Groupon.