Best news I've heard all year - join me in my celebrations!

[classixuk]

"Shares in Groupon plunged more than 10% on Thursday after the controversial online discounter surprised analysts with a fourth-quarter loss."

Groupon rattles market with surprise fourth-quarter loss - Telegraph

Lovely! I hope they fall by at least 65% more this year and then another 50% on top of that. Perhaps they'll get an insider look at how their 'customer' i.e. us, feels when you are forced to lose all of your profit!

:raiseaglasstime:

:biggrin:

 

[JoJo1980]

Ha KArma's a b***h! Its the Groupons that are making our hard work look cheap and worthless. Will be glad to see the back of them xx

 

[Ruth Mills]

Oh yes, well it doesn't take Sherlock to show that their business model just isn't sustainable...

 

[Alex-Lydia]

What comes around, goes around:biggrin:

Def best business news this year, this and Tesco drop in profit:biggrin:

 

[Annemarie]

There is a god afterall. Lol :biggrin:

 

[Lunarstorm]

There is a god afterall. Lol :biggrin:

ROLMAO, I actualy chocked on my coffee when I read that.

Hopefuly if Groupon go under, it will help ease the supid price wars that are going on.

I for one would never have used Groupon, as I would rather have no clients then have a full book of cheap one off clients that would most likely not value my time or treatments.

Sam xxx

 

[Miss Therapy]

I too stayed away from this (and various other copy companies that approached me!).

If it looks too good to be true...

 

[unas escarlata]

couldn't happen to a nicer bunch

 

[Pinkprincess73]

couldn't happen to a nicer bunch

Ditto xx

 

[Mrs RSM]

I am not sure I understand the animosity OP. Groupon don't force you to go through them. You have a choice and go in, or at least should go in, with your eyes wide open and well informed.

The way some people on here talk about Groupon and the clients it brings them makes me despair. I hear bitching and moaning about ''cheapskate clients just after a bargain'' er well you're the one offering it and thats the only reason they are...

 

[persianista]

I am not sure I understand the animosity OP. Groupon don't force you to go through them. You have a choice and go in, or at least should go in, with your eyes wide open and well informed.

The way some people on here talk about Groupon and the clients it brings them makes me despair. I hear bitching and moaning about ''cheapskate clients just after a bargain'' er well you're the one offering it and thats the only reason they are...

If the salon up the road from you did a groupon, and all your clients went there to get their £5 treatment, that impacts on your business.
Groupon has cheapened our industry whether we use them or not.

 

[classixuk]

I am not sure I understand the animosity OP. Groupon don't force you to go through them. You have a choice and go in, or at least should go in, with your eyes wide open and well informed.

The way some people on here talk about Groupon and the clients it brings them makes me despair. I hear bitching and moaning about ''cheapskate clients just after a bargain'' er well you're the one offering it and thats the only reason they are...

I see Groupon as preying on the vulnerable. They're no different to the bankers who offered sub-prime mortgages to people who could never afford to pay them back, but as long as the targets were hit and the banks made their money, screw the poor soul lumbered with the debt and the inevitable repossession somewhere down the line.

In our industry Groupon approach small businesses who don't know any better. Small salons with promises of hundreds of new repeat clients in return for them offering a service at peanuts income. Who earns the most from the transaction? Why, Groupon of course. And 6 weeks later they will feature your competitor who they have encouraged to offer exactly the same deal at £5 less than you. They'll send that deal to every one of the clients they told you they were sending to you "for repeat business" just 6 weeks before.

My eyes are wide open to the Groupon model. Most (especially new) business owner's eyes aren't. My celebration is as much for them as the news that the market are finally seeing that Groupon is one big Ponzi scheme.

The idea is excellent. The execution is not.

JMO.

 

[Ruth Mills]

I see Groupon as preying on the vulnerable. They're no different to the bankers who offered sub-prime mortgages to people who could never afford to pay them back, but as long as the targets were hit and the banks made their money, screw the poor soul lumbered with the debt and the inevitable repossession somewhere down the line.

In our industry Groupon approach small businesses who don't know any better. Small salons with promises of hundreds of new repeat clients in return for them offering a service at peanuts income. Who earns the most from the transaction? Why, Groupon of course. And 6 weeks later they will feature your competitor who they have encouraged to offer exactly the same deal at £5 less than you. They'll send that deal to every one of the clients they told you they were sending to you "for repeat business" just 6 weeks before.

My eyes are wide open to the Groupon model. Most (especially new) business owner's eyes aren't. My celebration is as much for them as the news that the market are finally seeing that Groupon is one big Ponzi scheme.

The idea is excellent. The execution is not.

JMO.

Exactly! *So* very well said! The problem is in the hard sell... the way that I have heard of people being forced to lower their prices as much as possible - to the point where they are working at way less than minimum wage and making a huge loss... the way that Groupon take such a large proportion of the cost of the deal themselves - meaning that you get probably less than half of the cheap amount of money that the client paid for the deal in the first place!

A lot of jobs in this country have already been "outsourced" to places like India and China, where labour is cheaper... not just call centres, but often highly-skilled jobs like software development. The outcome of this for ordinary people in the UK is that the fat cats are making even more money for themselves at the expense of people's jobs over here.

While you wouldn't want to hop on a long haul flight just to go for beauty treatments or to eat out, Groupon's business model is having the same negative impact on hard working people in industries like hair and beauty salons and restaurants... forcing small businesses to work silly hours and make a huge loss, just to make Groupon's fat cats rich - and also giving Groupon customers unrealistic expectations of how much things like beauty treatments should cost... you are right... just like the sub-prime mortgage scam that caused the financial mess we're all in now, it's another bubble that can only burst eventually... and probably sooner than people think!

In terms of the economy at large, Groupon's influence can only have a negative effect on economic growth too... working for peanuts and making a loss is going to have a detrimental effect on small businesses... in the worst case making them go bust and putting even more people out of work! Then after all those years of hard work you've put in to your business, other fat cat companies (e.g. the administrators) then end up getting all your company assets on the cheap!

To say nothing of the banks who suddenly withdraw funding (such as overdrafts) from small businesses so they are forced to fold! I read an article in the paper a couple of days ago about a plumbing business in Wolverhampton who were forced to fold - because - even though they had a healthy order book - they had some late-paying clients - and that stupid bank RBS - which we as taxpayers supposedly own most of anyway - decided they were going to withdraw their overdraft - so yet another small business ended up having to close - putting yet more people unemployed and more families at risk of getting their home repossessed by the banks!

Hopefully if we can wise up to the worst tactics of the fat cats, we can protect our own businesses from being swallowed up by those greedy vultures! And saying no to Groupon is a good place to start!

 

[Cheshire_Gal]

Groupon has cheapened our industry whether we use them or not.

Yes GROUPON has helped to cheapen the industry, but we havent helped ourselves either. Everyone wants to be an entrepreuneur these days and earn the big money, and doesnt want to work for someone else. Theres enough money floating about at present for everyone to make a decent wage, but people arent happy with that, they want to earn mega bucks. So what do they do, they go it alone and charge ridiculous opening offers. Lets not kid ourselves, the offers are for one reason only and thats to poach clients from someone else. Then you have the ones who use the 'im newly qualified' so have lower prices. Youre either qualified or youre not and the only reason you have lower prices is to poach clients (under the guise of building my client base). Then you have the salons that pay their their staff NMW, which i think is ridiculous. We ourselves are pushing down the price of beauty.

 

[persianista]

Yes GROUPON has helped to cheapen the industry, but we havent helped ourselves either. Everyone wants to be an entrepreuneur these days and earn the big money, and doesnt want to work for someone else. Theres enough money floating about at present for everyone to make a decent wage, but people arent happy with that, they want to earn mega bucks. So what do they do, they go it alone and charge ridiculous opening offers. Lets not kid ourselves, the offers are for one reason only and thats to poach clients from someone else. Then you have the ones who use the 'im newly qualified' so have lower prices. Youre either qualified or youre not and the only reason you have lower prices is to poach clients (under the guise of building my client base). Then you have the salons that pay their their staff NMW, which i think is ridiculous. We ourselves are pushing down the price of beauty.

I totally agree. A few years ago, I was paying £12 per hour, these days I pay min wage, and have girls clamouring for jobs. The reason being that it is harder to make any money these days.

 

[classixuk]

Exactly! *So* very well said! The problem is in the hard sell... the way that I have heard of people being forced to lower their prices as much as possible - to the point where they are working at way less than minimum wage and making a huge loss... the way that Groupon take such a large proportion of the cost of the deal themselves - meaning that you get probably less than half of the cheap amount of money that the client paid for the deal in the first place!

A lot of jobs in this country have already been "outsourced" to places like India and China, where labour is cheaper... not just call centres, but often highly-skilled jobs like software development. The outcome of this for ordinary people in the UK is that the fat cats are making even more money for themselves at the expense of people's jobs over here.

While you wouldn't want to hop on a long haul flight just to go for beauty treatments or to eat out, Groupon's business model is having the same negative impact on hard working people in industries like hair and beauty salons and restaurants... forcing small businesses to work silly hours and make a huge loss, just to make Groupon's fat cats rich - and also giving Groupon customers unrealistic expectations of how much things like beauty treatments should cost... you are right... just like the sub-prime mortgage scam that caused the financial mess we're all in now, it's another bubble that can only burst eventually... and probably sooner than people think!

In terms of the economy at large, Groupon's influence can only have a negative effect on economic growth too... working for peanuts and making a loss is going to have a detrimental effect on small businesses... in the worst case making them go bust and putting even more people out of work! Then after all those years of hard work you've put in to your business, other fat cat companies (e.g. the administrators) then end up getting all your company assets on the cheap!

To say nothing of the banks who suddenly withdraw funding (such as overdrafts) from small businesses so they are forced to fold! I read an article in the paper a couple of days ago about a plumbing business in Wolverhampton who were forced to fold - because - even though they had a healthy order book - they had some late-paying clients - and that stupid bank RBS - which we as taxpayers supposedly own most of anyway - decided they were going to withdraw their overdraft - so yet another small business ended up having to close - putting yet more people unemployed and more families at risk of getting their home repossessed by the banks!

Hopefully if we can wise up to the worst tactics of the fat cats, we can protect our own businesses from being swallowed up by those greedy vultures! And saying no to Groupon is a good place to start!

Amen!

And to add to your post (if I may) I will give an anecdotal piece of evidence:

I am signed up to a site that sends me all of the deals on offer that day from all of the Groupon type sites (LivingSocial, KGB etc.) in one email.

I have noticed a disturbing pattern for one particular salon.

Every 6-8 weeks they reappear on Groupon with the same deal - Wash, Cut, Finish, Highlights, Treatment for around £21. No joke. This is every 6-8 weeks. The salon has been around for a while and is obviously mistaking being busy with making profit. I feel very sorry for them. They're doing the service for £10 in revenue, and only getting repeat clients by advertising the same deal again. Until their accountant notices at the end of their tax year that they have made a loss (i.e. spent money every month instead of making money all year) they will carry on like lemmings running towards a cliff with Groupon as a silent partner taking 50% of their revenues for the privilege.

When they're gone (which will happen eventually) and the salon owner is facing bankruptcy along with the complications that brings, the only people left who made any money from the deals throughout the previous 18 months will be the Groupon rep and the CEO's/shareholders of Groupon.

Will any of them think about how that new car they are driving was bought at the expense of someone who wasn't educated enough to realise what was happening, and whose life now lies in ruins? Pah. They won't even remember her name.

I think it's very sad. It's akin to me promising unlimited sweeties to every child who gives me half of their pocket money, and then fobbing them off with an occasional 10p mix-up. Doable but outrageous at the same time.

:twisted:

 

[Cheshire_Gal]

I totally agree. A few years ago, I was paying £12 per hour, these days I pay min wage, and have girls clamouring for jobs. The reason being that it is harder to make any money these days.

Although i dont agree with NMW for qualified beauty therapists, I can understand why people pay it. There are other things you have to take into considerastion, such as how qulaified they are. Also why should you pay excellent wage when there is no loyalty. You get girl freshly qualified working for you at NMW, which is guarnteed no matter how many clients you do. They see you bringing clienets in charging anything upto £50 and hour for facials, and then other stuff. The average hourly treatment price about £30 for ease. They think 'i can earn that on my own'. What they dont realise is that you have spent years buliding up a brand and marketing. They then go it alone, moan that they arent making any money, then discount to poach clienets. By the time theyve taken their overheads and time travelling into account theyre probably no better off. But they cant see the damage they are doing. And mobile therapists make me laugh when they undercut salons stating its because their overheads are less. Yes they may be but the reason is to poach clients. Then they moan when a new mobile undercuts them. Haha makes me laugh.

 

[Alex-Lydia]

The reality is that when the economy is so messed up, we will all do what we need to survive. However, some people will not think it through and end up doing something that instead of helping their business will damage it, like I believe, Groupon.

The problem is that 'instant' results are very rare and a successful business is usually due to very hard work, over a long period of time, usually with the business owner having had to make hard decisions, that are not always popular with staff.

Healthy and fair competition is good for salons and clients, but a flood of salons with desperate owners, is never going to help anyone, standards go down, clients do not get the best products and treatments and staff suffer.

We need to value profession a bit more, and see ourselves as professionals.