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Baker Forced to Make 102,000 Cupcakes for Grouponers

Analog

Analog

Lifer
A London baker is steamed at daily discounter Groupon after customers flooded her shop and forced her to bake 102,000 cupcakes.
Rachel Brown offered a 75 percent discount on a dozen cupcakes through the Chicago-based daily deal company. With 12 cakes normally costing $40, her Need a Cake bakery was swarmed. More than 8,500 people signed up for the deal, which cost them just $10. Brown had to hire extra workers and wound up losing nearly $3 on each batch, according to the BBC. She ended up losing nearly $20,000.
"Without doubt, it was my worst ever business decision," Brown told the BBC. "We had thousands of orders pouring in that really we hadn't expected to have. A much larger company would have difficulty coping."


http://www.nbcchicago.com/news/loca...102000-Cupcakes-for-Grouponers-134312058.html
 
If you can't take the heat... don't turn on the oven.

Honestly, why would you ever put out a deal that you KNOW loses you money unless you're guaranteed it's a limited loss leader item?
 
What did she think would happen? And why did she price is so low to lose that much?

I also thought these sites had hard limits? Apparently she didnt use one on her deal.
 
I'm guessing she didn't expect to get that many people to get the groupon and such had to hire extra people which made her go into the red.

I can't recall reading a single positive groupon experience from a business that did it.
 
crownjules said:
Does she not think that she'll get no repeat business now from any of those new customers? Short term thinking...
Click to expand...

The type of person who uses Groupon is like the coupon clipper who tries to scam the store. I doubt there is much repeat business potential in their client base.
 
crownjules said:
Does she not think that she'll get no repeat business now from any of those new customers? Short term thinking...
Click to expand...

I would have to guess that the "attach rate" or whatever the statistic is called that shows repeat buyers after initial purchase through sites like groupon is terrible.

It doesn't take much time on "hot deal" forums to show that people are greedy, cuthroat bastards that are in this for nothing other than a one time cheap deal. The only time most of them will come back is when another deal is offered.
 
crownjules said:
Does she not think that she'll get no repeat business now from any of those new customers? Short term thinking...
Click to expand...

There was an article recently, around the time of the Groupon IPO, which interviewed both business owners who decided to participate in a groupon and a few people who bought them and most agreed that they won't see much, if any, repeat business. Most of the business owners were angry at themselves for participating because they ended up losing a great deal of money and saw no significant repeat business.

I am a member of Angie's List and they have what are called "Big Deals," which are coupons which give you big discounts off services provided by vendors. Whenever I see a service I need performed, I buy one. The vendor is counting on my repeat business if they do a good job but that is unlikely unless I need the service again and they have the lowest price.

EDIT: And for all you describing the kind of behavior above as being a "cheap bastard," I don't feel bad at all because believe me, many of these business would take shortcuts to save a buck.
 
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I remember they had a groupon in Boston for a cheap bike tune up. It was $20. My gf and I jumped on it. We wanted to use it, and we had to call to make an appt. The appt. was 3 months out if you had the groupon.
 
Gibson486 said:
I remember they had a groupon in Boston for a cheap bike tune up. It was $20. My gf and I jumped on it. We wanted to use it, and we had to call to make an appt. The appt. was 3 months out if you had the groupon.
Click to expand...

I would have made an appointment sans groupon, then when I had to pay, present the groupon. That's bullshit and I would do anything I could to fuck over that company.
 
Analog said:
A London baker is steamed at daily discounter Groupon after customers flooded her shop and forced her to bake 102,000 cupcakes.
Click to expand...

Typical. Can't calculate your cost, price yourself at a loss, then get upset at someone else over it all.
 
She's obviously not smart if she doesn't think 8500 new customers x who they tell is a bad business decision. i'd be willing to bet she recovers the losses quickly.(assuming her product isn't complete shit)
 
IceBergSLiM said:
She's obviously not smart if she doesn't think 8500 new customers x who they tell is a bad business decision. i'd be willing to bet she recovers the losses quickly.(assuming her product isn't complete shit)
Click to expand...

Do you really think a typical Grouponer is going to be a repeat customer? Of course not, they find a deal, get their one cheap thing, and move on to the next deal.
 
This thread is making me hungry for cupcakes.

Wait a minute. dozen cupcakes normally $40
75% discount dozen cupcakes now $10
she's losing $ 3 per batch (presuming that a batch is 1 doz)

Means that her cost is $7 per dozen. Selling for $40? That's a heck of a markup . . .
 
AstroManLuca said:
Do you really think a typical Grouponer is going to be a repeat customer? Of course not, they find a deal, get their one cheap thing, and move on to the next deal.
Click to expand...

I don't have the metrics on the average grouponer so I can't say for certain, however statistically, a favorable % do return, do become regulars and do spend more than the groupon.

Unless we she has us all fooled and she is milking this for additional publicity which is now that I think about it an even more likely scenario. She's reach millions with this headline.
 
nanette1985 said:
This thread is making me hungry for cupcakes.

Wait a minute. dozen cupcakes normally $40
75% discount dozen cupcakes now $10
she's losing $ 3 per batch (presuming that a batch is 1 doz)

Means that her cost is $7 per dozen. Selling for $40? That's a heck of a markup . . .
Click to expand...

Actually...

Normal Sale = $40
Groupon Sale = $10
Her cut = $5
Her "loss" = $3
Actual Cost = $8

soooo 500% markup?

I find it ridiculous that she can somehow calculate her loss but she couldn't (or wouldn't) figure out the cost of groupon.
 
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