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Why Groupon appears to be a ‘good’ thing
Sites like Groupon make a living by convincing businesses to offer their products and services at ridiculously low prices; the theory being, that these businesses will then gain an increase in returning customers who will then pay full price for the services offered.
This seems like a great idea if you’re either a new business or an established business which is struggling. However, this model only works for businesses selling low-cost items and does not work for service-orientated providers like aesthetic medical or cosmetic clinics providing treatments like laser hair removal.
Many clinics up and down the country jumped on the Groupon bandwagon without thinking of the dire consequences that lay ahead.
One clinic in my area fell foul and eventually closed down after months of fulfilling Groupon deals.
Why Groupon is actually a bad thing
So, here is how your Groupon deal works. Groupon will email you a package deal from a local laser clinic offering discounts of up to 90% off on laser hair removal. You then purchase that package and Groupon collects all the money. Then they take between 45 – 50% of that money as a commission for themselves. The other 50% gets paid back to the clinic in question, usually in three instalments spread several months apart.
For instance, if I am offering a £100 laser hair removal deal for £10, Groupon will keep £5 of that. So that leaves me with £5 which does not even get paid back to me in full right away. Let’s say for argument’s sake, that 500 people purchase that deal from Groupon, this would generate £2,500.
Great? No, not great. That £2,500 would need to cover the cost of an hour of clinic time for 500 consultations and patch tests, plus another 500 lots of 30-minute treatment slots in order to carry out the treatment.
This would mean that your local laser clinic, (if they’re doing things properly, without cutting corners) would be putting aside 750 hours of clinic time for the £2,500. This, believe it or not, would equate to the clinic making £3.33 per hour.
There is no laser clinic on this earth that can afford to run and deliver laser hair removal treatments on £3.33 per hour.  It is little surprise therefore that daily deal sites like Groupon have been the reason behind so many businesses closing up shop.

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Edit How groupon deals are bad for the customer and the clinic