Groupon has become the rage. Everyone including my eldest son is busy looking for bargains over the Internet and I will admit our family has taken advantage of some of these great deals. We’ve bought coupons for the local Thai food restaurant, gourmet cupcakes etc. But there’s another side to this trend that needs to be heard! As a small business owner, I have been approached several times to enlist Groupon (plus other similar companies) to help promote sales of my adorable helmet covers (www.tail-wags.com). The problem is I would actually be losing money if I went along with the scheme. Here’s why: Groupon wants to sell a product for at least 50% of the regular retail cost. So instead of paying $40.00 for a Tail Wags helmet cover, it would cost $20.00. On top of that Groupon wants to collect 50% of that price so they’d receive $10.00 and I’d receive $10.00. In other words, I’d be losing money because the cost of my helmet covers is over $10.00. So obviously I’m not going to be promoting my product via their site. The only products that can successfully be sold on Groupon are the ones that have a huge mark-up in the first place. Often these are products produced overseas in China where labour costs are extremely low. Products such as mine that are made exclusively in Canada cost more to produce. I’m certainly not willing to work for 25 cents per hour. Are you? I wish there was an easy way to lower costs but I’m a die-hard “Made in Canada” fan, which is why I proudly display the above logo on all of my work and web site! What’s your perspective on the couponing craze? Would love to hear your point of view!
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- Tags: Business, Coupons, Entrepreneur, General, Groupon, Made in Canada, Marketing, Tail Wags Helmet Covers