Not since Ponzi Schemes became epidemic in the early ’80s has a business fad risen and fallen so dramatically…
First allow me to say on behalf of Comments Section naysayers, "They told me so."
However when the force to be reckoned with known as Groupon took Kansas City and the nation by storm barely three years back, it was almost magical. As I recall, Groupon had maybe 50,000 people on its email list early on, then grew rapidly to 100,000, then 350,000. And last time I checked, Groupon was thought to have upwards of three-quarters of a million Kansas City subscibers.
In a city of two million, a fourth of whom supposedly do not have broadband, that’s a bunch.
There followed by an onslaught of Groupon wannabes ranging from Lucky Monkey to Muncharoo to the Kansas City Star‘s Dealsaver.
Speaking of Muncharoo – a locally-based Web wheeler dealer with possibly the worst name in the biz – a two week old rumor that it had been bought out by Florida-based CrowdSavings was confirmed last week. The deal reportedly put somewhere around $500,000 in the pocket of founder Eric Vianello who did not return a call on the matter.
And while half a mill may sound like peanuts in the world of high dollar e-deals, it’s a pretty penny when what it boils down to is buying an email list of 60,000 subscribers and change.
Then again, why sell out in the first place if you’re making money hand over fist?
Exactly my point.
The lack of light at the end of the daily deal tunnel reared its ugly head in January on 60 Minutes.
That’s when the show noted that Groupon had yet to make a profit and, unlike other "high tech" companies, was saddled with extremely high overhead in the form of the staffers required to market its daily deals.
Oh and one more thing…
That Groupon, while at the forefront of the daily deal biz, was being besieged by competition from anyone and everyone – local TV and radio stations, newspapers like the Star, alternative weeklies like the Pitch and entreprenuers like Vianello.
Meanwhile, Groupon’s stock has fallen more than 50 percent from its initial public offering price. No wonder Vianello opted out.
One need look no further than the Star‘s Dealsaver for the answer. Locals appear to be growing weary of the daily bombardment of "bargains" for cheap haircuts, cheap eats, cheap this and cheap that.
When’s the last time you took a good, hard look at your ValPak mailing?
And check out some of the Star’s current Dealersaver action.
A Lee’s Summit carwash is at only 286 deals sold on a $12.50 to get $25 car wash coupon. A Liberty fireworks stand has sold 77 deals @ $10. The UPS Store in Oak Park Commons has 30 deals sold. The Jumping Jax play area in Joco has 58. Tina Marie’s Bakery in Shawnee 93.
Get the picture?
That’s not exactly what one would call "minting money."