What is the Groupon’s long term effect on Small businesses?

Nandakumar | February 14 - 2011

In the recent months Groupon not only heard of its bidding offer by for $6 billion dollars, its effect on small businesses particularly how it turned an ordinary business in to more profitable. Of course one or two business may lose its margin in short term but they use the customer’s response wisely sure it will be succeeded in the long run.

Why are businesses losing by Groupon?

Because they may be wrongly calculated the profit and over estimated the customers response. Initially businesses may think that people who come for purchasing the Groupon deal products will purchase some other products in their stores, but it may go wrong.

How can you turn your business 100 % profitable using Groupon?

Use Groupon as a marketing tool to promote your products and services other than using as a profit making tool. For some type of businesses it will be profitable example coaching classes, yoga, spa, hotels and some other services where they are not utilizing their resource fully. But it may not be suitable for the products such as manufactured goods. Since it was bought at small margin and you can’t offer 50% off for those products.

How should use Groupon effectively?
In any business there is both positive and negative points are there. You must think twice before you offer your products or services for Groupon. Before the Groupon era it was very costly to promote a small business and took years to bring the business profitable one. But Groupon makes it in a day with its millions of customer base. Use it as an advertising media to reach the mass in the cities and offer some discounts to your loyal customers.

In this way any one can manage their business well and make it profitable also. In the business development path you can start your Groupon clone websites for your customers. Ndot offer the premium version for $95. With the investment of few hundred dollars one can start their own Groupon clone site and continuously offer their services to customers.