I had a rep. from Groupon call us a month or so ago, said a fixed detailing shop ran an ad with them the previous month and sold over 700. So naturally I took a good look at it.
The fixed detailing shop ran a wash and wax ad for $25.00, $40.00 off their regular price. They sold 783 of these! A whopping total of $19,575! Pretty darn good for a two day coupon deal.
I asked for a breakdown of costs if I ran with a similar deal. Of the $25.00 profit Groupon would keep half of that, leaving my company with $12.50 per coupon sold. If I sold 783 of them we'd make out with $9,787.50.
So I did some math and told the guy he was nuts. After you figure in gasoline, wax, soap, supplies, tire shine, man hours involved, window cleaner, etc etc etc.....in the end you lose your rear.
Then factor in the time involved for a one or two man team. Even estimating that a wash and wax would take one hour, that's 783 hours to complete the coupon order. That's 19 and a half weeks working 40 per to complete them all. Almost half a year for less than $10,000.
You may be able to structure a better deal and improve upon what I laid out above, but don't let the initial money sway you into a deal without looking at the whole picture. It's also worth noting that just because the folks who buy these coupons use you once for the coupon deal, it doesn't mean they'll be returning. They're on sites like Groupon for a reason.
