Groupon deal erases bakery profit
November 22, 2011 4:02PM
he Groupon logo inside the online coupon company's offices Thursday, Sept. 22, 2011, in Chicago. Online coupon seller Groupon Inc. is discounting its expectations for its first stock offering, reported Friday, Oct. 21, 2011. The company, which offers consumers daily discounts targeted to their city and preferences, now expects net proceeds of about $478.8 million from its initial public offering of 30 million shares. (AP Photo/Charles Rex Arbogast)
Updated: December 24, 2011 8:17AM
A wildly successfully Groupon promotion wiped out a year’s profit for a small British bakery that had to hire outside to fulfill orders for 102,000 discount cupcakes.
The “Need A Cake” bakery in Woodley had offered 12 cupcakes, which normally cost around $40, for $10. Owner Rachel Brown, who normally fields about 100 orders a month, was swamped with 8,500 orders before she bailed out, the BBC reports.
“As soon as we were making, packaging and sending the cakes out we were on to the next order,” she told The Daily Telegraph.
She figures the extra help she had to hire cost $19,500, or about a full year’s profit.
Heather Dickinson, a Groupon spokeswoman, told the newspaper that there was no limit to the number of vouchers that could be sold. “We approach each business with a tailored, individual approach based on the prior history of similar deals,” Dickinson said.
Gannett News Service