I would argue that the only infinite supply of deals are deals where the profit margin is so high that it supports profit at 50% off plus Groupons cut.
A restaurant does not have 300% profit margins, so long term a restaurant cannot support this model. Only service businesses, or businesses with fixed costs with low variable costs per additional customer, can be on there.
Restaurants have very high fixed costs and 60-70% margins (basically, the food) so even with a 50% cut to Groupon, they can usually make it work. With a 20-40% cut to Groupon, they can make it work without much deal overage or return customers.
But I thought the main premise of Groupon is that the deal brings people in and the <fill-in-the-blank> from the business brings people back. I guess a deal could be run again to capture new customers but it's hard to imagine the need if the initial brought in customers and more importantly, brought back customers.
Any stats out there on a company that has done more than one daily deal an their resulting numbers? I would suspect diminishing returns, lots of people that took the first deal and weren't converted into customers coming back for another big discount.
A restaurant does not have 300% profit margins, so long term a restaurant cannot support this model. Only service businesses, or businesses with fixed costs with low variable costs per additional customer, can be on there.