Web

Small business owners ‘fed up’ with Groupon and its clones

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A number of small business owners in San Francisco are tired of the swarm of pitches from Groupon and the wide variety of clone daily deals services, reports Business Insider. Their weariness comes just after a LivingSocial salesperson told the publication that the daily deals industry has reached its saturation point.

One business owner, Joe Hargraves, who runs Tacolicious, says he’s received around 40 pitches over the last year from various deals services, including Groupon. Hargraves says he has turned down all of them because his prices are already low, and doesn’t believe he’ll benefit much from a one-time deal that brings in customers who would likely never return.

Another owner, Mark Pastore of Incanto, calls daily deals and other forms of discount marketing “the lowest form of marketing, like puns are the lowest form of humor.” He too has been bombarded with pitches, about one or two a week from kids just out of college “who don’t know anything about anything.”

While this anecdotal evidence shouldn’t be taken as indicative of the attitudes of business as a whole, a recent survey of 300 business that participated in Groupon deals shows that 82 percent were dissatisfied with the number of return customers brought in by the deal, and half of those surveyed said they would not participate in future deals.

To add to the bad news for Groupon, the Wall Street Journal reports today that the Securities and Exchange Commission is allegedly investigating the accounting techniques used by the company to calculate its balance sheet in preparation for its forthcoming IPO.

None of this comes as any surprise to us. Our own Nick Mokey wrote back in May that the daily deals industry appears ripe for downsizing. Of course, none of this means Groupon and its competitors won’t continue to make money, either. But the signs don’t look particularly good.

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