Updated Oct 22, 2011 - 10:48 am

Are daily deal sites bad for businesses?

From the biggies like Groupon to local daily online deals, there are hundreds of websites that are happy to save you money by giving you bargains on ski lessons, massage, hair cuts, and oil changes.

Deals How do you get in on some of these deals if they're passing you by?

Is this a good business to start?

Are these deal sites helping or hurting small companies?

Answers on The News Chick radio show (podcast here )

You've probably heard the name Mark Zuckerberg. He's the guy credited with starting Facebook. You might not be as familiar with the name Andrew Mason. He's the 29-year-old behind the fastest-growing company in Web history - Groupon. You'll hear from Mason, and from the company some say will surpass Groupon in a year or so, Living Social.com.

From the oldest and biggest, to the smallest and newest coupon sites. Daily Deals for Moms just went online in Seattle this month. Angela Gilbert says she's trying to help mom-owned companies grow, rather than simply appeal to deal seekers.

One of my favorite social media guys Leigh Fatzinger who started a social media content agency in Seattle called Nology, explains why he thinks these deal sites are not good for small businesses. And Farnoosh Torabi, a contributor for Yahoo Finance among other sites, has a caution for consumers who jump on daily deals.

I'm a thrifty person, but there's a Seattle guy who's cheaper. David Volk, author of The Cheap Bastard's Guide to Seattle, has some local bargains and advice on teaching kids to be frugal.

If you're a fan of TLC's Extreme Couponing, you'll enjoy tips from the Krazy Coupon Lady, Joanie Demer.

Also, my friend Ed Wilkening tipped me off to HeyItsFree.net for some great birthday freebies. Sunday's my birthday.

Have a great weekend!

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dcnilsen wrote...

These are only good for businesses

October 21, 2011 10:26 am

The ones that i have purchased were items and services that i never would have purchased if they were offered under these deals. Then once i have been able to try it out i will be happy to pay full price if need be for a service/item i liked.

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BikeNazi wrote...

These are terrible for businesses

October 21, 2011 11:28 am

I have a friend whose wife runs a massage service. She got something set up with Groupon or Living Social or something like that offering $100 massage for $50 or whatever they offer. So many people bought the deal it will take her 6 months to clear out the backlog of first-time buyers who bought in through Groupon at a reduced rate AND she has to hire new massage therapists AND find a larger space to include the new employees just to fulfill the Groupon deal. Groupon got paid. The customers got a cheap massage, the small business is going to implode over the crush of sales at a reduced margin. My friend's wife doesn't get to pay the new employees less or get a break on the new rent because of Groupon.
The argument that "Well she would never get that business if it wasn't for the marketing provided by Groupon" is weak. Those customers will likely not ever come back for a full price massage (since another deal at a new company will come up soon anyway) and they will be so annoyed that it will take 5 months to get what they paid for anyway.
Where is the Win! for this small business? Groupon and Livingsocial is like turning your crops over to the locusts and saying "They'll help me with the harvest!"

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Can't we all just get along? wrote...

@ BikeNazi

October 21, 2011 12:41 pm

Really?? If a person signs up for something like this, I would think that would have the resources to honor their agreement. The business owner can set a limit to how many of these deals they want to sell so if they try to reach for the stars it's their own fault. I have used the deals on MNW.com a couple times now and will continue using the businesses because they give good customer service. If the business owner does not have the resources or can't research the deal properly as to what they're getting into....tough.

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BikeNazi wrote...

Really.

October 21, 2011 1:44 pm

If it's a small business' first time (and likely last time) using Groupon or Living Social they have no idea that they might see a 4000% increase in orders at REDUCED PROFIT MARGIN. Groupon's rationalization for this when the objection comes up is "Meh, just use the funds you were allocating for marketing anyway to offset the loss." However, it's a small business. They still have rent and payroll and taxes and utilities etc to pay for before they can splurge on expensive marketing programs. How many massage therapists have you ever heard advertise on KIRO radio? If you have, it's only the very biggest ones.
Your attitude is very much the same as the subprime lenders who sold mortgages to anyone regardless of their income or ability to pay. The bank, just like Groupon, still got paid right up front. When my friend's wife has to shut her doors because she can't schedule regular full price customers to subsidize the discount ones she runs out of cash flow and goes out of business. Now she and all the extra employees are on unemployment and food stamps and welfare. Privatize the profits, socialize the losses.
Sites like Groupon and Livingsocial and Cheapbast ard.com and what have you cause a Pavlovian Walmart reaction in people: "That crap is cheap! I don't care who suffers as long as I get mine! If the business owner does not have the resources or can't research the deal properly as to what they're getting into....tough."
If you want to support small businesses then do so, but don't screw them out of their ability to make a living.

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Can't we all just get along? wrote...

hmmm

October 21, 2011 1:50 pm

oh i do support small business.....as long as they're smart enough to stay in business and don't let something like voluntarily signing for for sites like groupon shut them down.....why do you think they sign up for them anyway? to NOT make money?? Maybe you should go join your friends in westlake.

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Market72 wrote...

Uhhhhhhhhhhhhh....

October 21, 2011 12:34 pm

BikeNazi... Well said! I can't agree with you more. These sites will eventually implode themselves or be bought by bigger web companies only to be taken apart for their customer base. In the end, it's the small businesses who suffer and also the consumer, who has to wait months and month sometimes to use their coupon.

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dcnilsen wrote...

are you kidding?

October 21, 2011 1:40 pm

No one has to sign up for groupon or anything else. So if you do, that is your choice. Also, you can set a limit and a timeframe for when it is good for. If you can't run a business well enough to understand how to utilize something like groupon then maybe you shouldn't even be running a business. These things are probably one of the only reasons i have tried new things the last few years. Things i never knew about, i was able to try at a reduced cost and now enjoy regularly.

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Linda Thomas

Linda is co-host of Seattle's Morning news, 5-9, on 97.3 KIRO FM. This is her local news blog, with an emphasis on social media, technology, Northwest companies, education, parenting, and anything else that grabs her attention.

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Updated Oct 22, 2011 - 10:48 am

Are daily deal sites bad for businesses?

Linda Thomas

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