How Extendable Is Groupon’s Business Model?

 Groupon Business Model

Is there any customer out there in the space who hates discounts on products? You can hardly find one! It is the prime reason behind the success story of the group buying business. The lucrative discount offers have made this business highly demanding all over the globe. Though, it is believed that this business is proved to be super hit, the talks about the cons and downfalls associated with this business hasn’t stopped ringing bells in the ears of many.

So, how extendable is groupon business model? Let’s discuss in detail on what areas this business lacks sustainability and how long it can continue its winning streak in this post.

Groupon business failure:

The question over the sustainability of this business arises because of the failure confronted by Groupon, the popular group buying site. However, what most questioners have failed to track the exact reasons that led to the decline of this famed site! The most obvious reasons are: non-accessible customer service and pathetic strategy planning. These two are great assets to any company which wishes to push its sales percentage to the next level. So, Groupon lacked the major factors that contributes to success and faced the music accordingly. From my point of view, don’t account for the Groupon failure but just make out the planning of your daily deal business efficiently for roaring sales.

Deals industry is growing strongly:

In fact, there is a fierce competition among the deal sites online and every day there are new sites hitting the market. What do you infer from this stat? Yes, the industry is growing. Today, you’ve stunning group buying software available for this purpose and it shortens and quickens the process of setting up a deal site. Online has paved way for setting up great daily deal sites and customers by no means have any idea on missing out opportunities to shop products in bulk with discounts. Even a few sites offer customers the power to bargain and no customers would wish to throw away such powerful options.

Business model of deal business:

It works like this: the deal site owner, vendor, and customers need to work hand-in-hand to taste success. Apart from this, the staff of the deal business should possess exemplary knowledge over this business to make it a roaring success. So, the success of this business model relies on a lot of factors, unlike only quality and customer service for other business, things would go out of control if any of the above-stated factors lacks credibility.

How extendable is groupon business model?

It is quite extendable to some years at least, measuring its current growth and demand. Until the vendors, suppliers, customers stop backing up each other this business will be at its peak and there is no doubt over this. But, when a situation arises when vendors no longer support setting up deal sites, or suppliers show no interest on stocking up inventories, and customers don’t opt for discounted products, then there will be a decline in the growth of this fast growing industry. Till then, it is going to rock the entire online market.


So, as of now, if someone throws a question at me “Which is the quickest way to make more money online?” My instant answer will be “setting up a daily deal site.” I hope by reading this post you’d have gained some ideas on what would be the future of this group buying business in the upcoming years. Don’t give in to the hearsays but analyze the market before setting up this money-making deal business.

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5 Responses to How Extendable Is Groupon’s Business Model?

  1. Katherina says:

    Groupon is a good money making site. But for small business it is impossible to pay high commission rates. So it is good for them to start their own group buying site to popularize their deals

  2. Lisa says:

    Great points rounded up here for Groupon business failure. Thanks for the post.

  3. Maj says:

    What is the pay commission rate you have mentioned @katherine. That is for vendors or buyers?

  4. Bernard says:

    Try to explain the groupon business model descriptive and how to implement that model for small medium business. This might help so many SMB

  5. Eric says:

    Thanks for explaining the groupon clone model and how its broken. Failure explains the reason for broken. If this daily deals model is implemented, most of the small business will be benefitted

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