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As David Wolinsky cleverly states in his recent article:

“There’s a new rhetorical question on the rise: If a company runs a Groupon that completely decimates that business, whose fault is it?”

It’s happening more and more frequently – businesses run a deal on Groupon for months that forces them to lose a lot of money on each transaction and ultimate tank. The most recent being Food For All Market, a Philadelphia-based “gluten-free version of Panera Bread”. Owner Amy Kunkle admits that she didn’t fully understand the risks involved when using Groupon to offer deals to consumers.

Last June, Food For All Market ran a deal that lasted three months which allowed “an unlimited number of customers to get $30 worth of merchandise for $15. But Kunkle lost more than 50 percent on each transaction because Groupon took an additional $8 per sale.” In the end, the company was $10,000 in the hole.

The lesson to be learned here: Do the research and calculate the risks before jumping into the Groupon craze!