[unreal37]

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.

[pbreit]

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.