just a post about coupons.

This is not really the place for simple free writing. but at the same time it is important to have somethgin to say about anything really. I just need to write and get past the first few lines of nothing to say. The first thing that cane to mind this eventing was spreets, and groupon and all of these other deals aggregation sites.

When i first came across them i thought that they were a ridiculous idea. Yet the businesses that are investing in them suggest that there is more to it than that. Why would a business offer a such huge discounts to such a a large number of potential customers? It doesn’t seem to be a sustainable model to me, yet every day there are hundreds of people that sign up for the deals, handover their cash and presumably get a product at a great price.
The businesses offering the deals get a flood of sales at (i imagine) much lower margins than normal but they get a chance to prove themselves to a new customer.

OK, so this can work for products where the main component is a service where the margins are generally higher than for a physical product. This allows a steep discount to be applied without making a horrible loss. business that offer a deal that give them a zero or negative margin are in for a rough ride. It also requires a product that has excess inventory that would otherwise be wasted. Again this can apply to services where there are peak times and quite times. The business can require that the offer be channeled in to the quiet times to improve the overall revenue, again providing that this is not done at a loss.

The biggest problem that I see here is that the type of customers that these group voucher deal sites attract are the least loyal, price sensitive bunch around. They will hop off to the next deal without even remembering who they last bought a product from.

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