Groupon Versus Paytrust

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Groupon versus Paytrust Groupon Groupon (a portmanteau derived from "group coupon") is a deal-of-the-day website that features discounted gift certificates usable at local or national companies. Groupon was launched on November 2008, the first market for Groupon was in Chicago. The idea for Groupon was created by now-CEO and Pittsburgh native Andrew Mason. The idea subsequently gained the attention of his former employer, Eric Lefkofsky, who provided $1 million in "seed money" to develop the idea. The company offers one "Groupon" ("group coupon") per day in each of the markets it serves. The Groupon works as an assurance contractusing ThePoint's platform: if a certain number of people sign up for the offer, then the deal becomes available to all if the predetermined minimum is not met, no one gets the deal that day. This reduces risk for retailers, who can treat the coupons as quantity discounts as well as sales promotion tools. Groupon makes money by keeping approximately half the money the customer pays for the coupon. So, for example, an $80 massage could be purchased by the consumer for $40 and then Groupon and the retailer would split the $40. That is, the retailer gives a massage valued at $80 and gets approximately $20 from Groupon for it. And the consumer gets the massage, in this example, from the retailer for which they have paid $40 to Groupon. There are certain businesses to which Groupon will not offer its services, including shooting ranges, abortion clinics and strip clubs. Unlike classified advertising, the merchant does not pay any upfront cost to participate, Groupon collects personal information from willing consumers and then contacts only those consumers, primarily by daily email, who may possibly be interested in a particular product or service. Groupon breaks into new markets by identifying successful local businesses, first by sending in

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