If you have been following my blog at all, you will notice that I write about wine mainly. I add a few stories about stuff in general and try to plug my website. By the way, it’s doing tremendously well, thanks for asking. Moxie’s brick-and mortar store has been humming along nicely since mid November, it’s time to make the money folks- Black Friday is exactly what it sounds like, retailers finally turn the corner and start to make profit. Everyone relies on sales to get the thing started and this year was no exception.
In fact, they didn’t wait until Friday, nor did they limit it to Friday. In sheer desperation, fueled no doubt by the media, big boxes offered discounts for days, weeks- extending Friday to the weekend, Cyber Monday is still running on many a site. Everyone wants a piece of the action, sales on the internet are way up, credit card companies are touting robust numbers and people are tired of scrimping and saving. Our business is finally doing what it is supposed to be doing, providing customers with great gifts that are unique, packaged properly and serviced by a great group of salespeople who take customer service to heart.
Time for the rant- it’s four letter symbol is GRPN. Down 50% from it’s opening day high and trading well below it’s release price, the stock is getting crushed, and it’s only been around for 5 minutes (three weeks actually). Serves them right. Serves the foolish investor who bought at 30, perhaps I could buy some of the $30 shares, minus 50% and let them get the 50% of that take. In other words, 25% of the total take ends up in pocket.
That is what Groupon thinks is fair. You got it, 25% of the value that a merchant should be getting is actually deposited in their account, perhaps as much as 60 days after the event. They were kind enough to offer us a ‘deal’ of only taking 25% if we signed up for a deal with them. Such a bargain…. can I get two?
Seriously folks, Groupon is not going to be around for ever, their business model is flawed in conception. They offer a service to businesses who are either new, or dead, and then screw them hard. A competitor just ran a Groupon, and then posted it on her Facebook page. Real smart lady, offer a 50% discount to your current customers. It’s about getting NEW customers, or maybe she needed some 60 day cash flow. Who knows, but the genius ran it again 4 weeks later. By my simple math I figure she lost a bundle. How many new customers did she get? Who knows, but I can almost guarantee you that they won’t be repeats at full price. You see, the people that actually buy the Groupons are one-timers. They move on to the next deal, the next day. You have not bought loyalty, nope. Just an expectation that you will have another deal soon. Very bad business practice. The Deal a Day addicts don’t generally come back unless they can get a deal, it’s in their genes. Try and get an extreme couponer to buy a loaf of bread at regular price, not going to happen. So, as a businessman, I refuse to fall for the pitch they sell. I rely on superior customer service, excellent product mix and good old fashioned loyalty to run my biz, am I too 1999? We will see in a few years. Rant over……