By JOHN ROOD
Groupon, the group buying site that is taking the Internet by storm, debuted in Lincoln this week with offers for discounts on loose meet sandwiches and yoga classes.
If you haven’t checked it out yet, the idea is simple: You check out the site or get a daily email and see an offer that is almost too good to be true. The catch? In order to get the deal, a bunch of other people need to buy as well. Groupon’s founders are counting on the viral nature of the web, email, Facebook and other social sites to help spread the word.
Not enough buyers? Then no dice, come visit us tomorrow. Pretty powerful stuff … and the power of the site to move tons of special offers is simply amazing. For example, a recent offer for Sushi Japan in Omaha garnered more than 1100 sales in a single day. The deal? Just $13 for $30 of food and drink.
Of course the downside for the merchant is the hefty percentage Groupon keeps for brokering the deal. We’re told it is as much as 50%. Whether that margin is sustainable for local merchants remains to be seen. The company is not yet two years old and has raised $30 million to fuel its expansion.
As a guy who used to spend his time helping newspapers try to change their business models for the web, you have to admire what Groupon has done. Google AdWords aside, this is the first time a national player has been able to engage local “mom and pop” shops in a big ecomm sort of way.
Of course, all of that success has put a huge target squarely on Groupon’s backside. Barriers to entry are low and competitors are springing up every day. Kudos to my former co-workers at the Journal Star for beating Groupon to the punch in Lincoln and launching http://www.journalstar.com/dealoftheday before the big guys.
My advice? Take advantage of the deals, but use those coupons quick.
The battle for the local deal dollar is in play.
Enjoy the cheap sushi.