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Old 03-18-2011, 02:43 PM   #1
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Default For Sale - DC Groupon deal - 50% off beginners kit

Groupon deal for a Midwest beginners kit:
http://www.groupon.com/deals/midwest-hydro-dc

"for $64, you get a brewing essentials equipment kit (a $56.95 value), a steel bottle opener (a $14.95 value), your choice of either an Irish red ale, an autumn amber ale, or an Irish stout ingredient kit (up to a $25.95 value), an instructional DVD (a $4.95 value), and a $25 gift certificate for your second batch shipped from Midwest Homebrewing and Winemaking Supplies (up to a $130.80 total value). A $12 shipping fee is not included in the price of the Groupon"

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Old 03-18-2011, 03:00 PM   #2
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That's a damn good deal. The kit and gift certificate alone are worth $50.

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Old 03-18-2011, 03:06 PM   #3
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Yeah, that's not the deal I get.

I hate Groupon.

Edit: Ahhh, found it. I still hate Groupon.

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Old 03-18-2011, 03:24 PM   #4
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Do you have to be a DC local for this to work? I know nothing about groupon.

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Old 03-18-2011, 09:10 PM   #5
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Wow...great deal.

Unfortunately, I don't like taking advantage of groupon because of how much these business owners lose.

Before I knew the details of groupon, I loved it. I know the owner of a local craft beer store. He has some of the best beers in the area. He did a $50GC for $25. I obviously bought one. When I went to redeem it, I talked to him and found out he lost over $25k just from selling 750 tickets.

He said that groupon takes something like 40% of whatever you charge. So they were taking $10 and he was only making $15. He was losing $35 for every one sold. Now...I'm sure he didn't lose that much real money since there's obviously a markup, but I'm sure he lost at least half of the $25k.

I don't like doing that to local businesses. Big box stores...bring it on.

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Old 03-18-2011, 11:46 PM   #6
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Quote:
Originally Posted by Suthrncomfrt1884 View Post
Wow...great deal.

Unfortunately, I don't like taking advantage of groupon because of how much these business owners lose.

Before I knew the details of groupon, I loved it. I know the owner of a local craft beer store. He has some of the best beers in the area. He did a $50GC for $25. I obviously bought one. When I went to redeem it, I talked to him and found out he lost over $25k just from selling 750 tickets.

He said that groupon takes something like 40% of whatever you charge. So they were taking $10 and he was only making $15. He was losing $35 for every one sold. Now...I'm sure he didn't lose that much real money since there's obviously a markup, but I'm sure he lost at least half of the $25k.

I don't like doing that to local businesses. Big box stores...bring it on.
If he didn't feel that he was going to recoup that $25K in losses with the influx of new, repeat customers he wouldn't have done the Groupon in the first place. These types of sites (Groupon, Living Social, Youswoop, etc) are handy marketing tools, but they do come with certain risks and should be fully investigated to determine if the long term benefit will outweigh the short term losses.
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Old 03-19-2011, 12:28 AM   #7
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That has always been the benefit I'd seen with Groupon and the others as well... Sure you're not going to make killer profits on what your selling but the whole idea is to introduce yourself to new customers.... Advertising isn't cheap but at least this way the only people you are paying to advertise to are people that are actually going to come sample your goods/services. That being said, If I were to run a Groupon deal I'd do my best to make sure I was either coming close to breaking even on my offer or making sure there was a cap limit on the deal.... I've seen some of those things blow up and have 2,000 some odd people buy them.

Also, I live in Seattle and saw a deal like this (may have been the same one in fact). I was going to tell some friends who are considering getting into brewing about it until I saw that it was from a non-local business...not sure if it was DC but it was definitely East Coast. I'm not too psycho about making sure that I only support local business but I kinda felt that was part of the allure of these deals to me.

Sorry, I know this isn't a business forum but I had to put in my $0.02

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Old 03-19-2011, 02:00 PM   #8
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So I understand the business concerns, but I have to put some kind of faith in the business owner that they knew fully what they were getting into before actually doing it.

But back to lebshiff's question...how does groupon work? Will I run into any issues purchasing this if I'm not DC local?

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Old 03-19-2011, 03:01 PM   #9
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Quote:
Originally Posted by Suthrncomfrt1884 View Post
Before I knew the details of groupon, I loved it. I know the owner of a local craft beer store. He has some of the best beers in the area. He did a $50GC for $25. I obviously bought one. When I went to redeem it, I talked to him and found out he lost over $25k just from selling 750 tickets.

He said that groupon takes something like 40% of whatever you charge. So they were taking $10 and he was only making $15. He was losing $35 for every one sold. Now...I'm sure he didn't lose that much real money since there's obviously a markup, but I'm sure he lost at least half of the $25k.
Keep in mind though that the best estimates of the redemption rate of Groupon purchases is 70-80%. So, of those 750 groupons sold, 150-225 will never be redeemed which means he got the money & kept the beer -- pure profit.

Still, a Rice University poll showed that 40% of businesses that used Groupon wouldn't do so again (but 60% would). So it's complicated what the breakeven point is with the new customers brought in factored in.
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Old 03-19-2011, 04:50 PM   #10
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Quote:
Originally Posted by nestorlinks View Post
So I understand the business concerns, but I have to put some kind of faith in the business owner that they knew fully what they were getting into before actually doing it.

But back to lebshiff's question...how does groupon work? Will I run into any issues purchasing this if I'm not DC local?
Its an online redemption, nothing in the rules that say you have to be local. Basically Groupon will send you a coupon code that you enter into Midwest's website when you're checking out.
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