Now, Groupon is attracting people from all over the world from different age groups. That made their main demographics adults and young adults who regularly used the internet and checked their email inbox back then. When Groupon first started in 2008, they mainly tried to reach users through their website and newsletter. A part of the agreement with their vendors includes a minimum number of sales or revenue generated before Groupon can step in and take their cut. The commission Groupon takes isn’t immediate or static. In most cases, Groupon takes anywhere from 50 percent to 90 percent (on rare occasions) of sale revenue generated from buyers using their coupons. After all, they played a role in marketing the brand and help it sell a product or service. How are they making money when there’s less money being paid to begin with?įor every purchase made using one of Groupon’s special discount codes or offers, they receive a percentage of the purchase as a commission. So far, Groupon may sound too good to be true. Before selling you a coupon, Groupon first makes a deal with the e-commerce website or brand selling the product or service. In the buying process, Groupon is the middleman or broker. But instead of directly selling products to consumers, it sells users coupons that give them access to discounts, limited offers, and buy-on-get-one deals for various e-commerce websites and in-person services. Groupon is categorized as an e-commerce website.
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