

“Without doubt, it was my worst ever business decision. We had thousands of orders pouring in that really we hadn’t expected to have. A much larger company would have difficulty coping,” said Rachel Brown, owner of Need a Cake bakery.
Groupon, Living Social and Seize the Deal can be great for consumers but like any business tool it has its consequences. Brown posted a 75% discount on her bakery’s cupcakes and over 8,500 people snatched the deal. The unexpected response resulted in additional hiring to accommodate so many people. In the end she ended up losing $20,000.
Groupon’s defense; Brown didn’t add a limit on the number of vouchers that could be sold and Groupon did nothing wrong. “We approach each business with a tailored, individual approach based on the prior history of similar deals,” Groupon’s international communications director Heather Dickinson told the BBC.
So if you’re a small business and considering Groupon, Living Social or Seize the Deal, just be aware. You should put a cap on how many deals can be seized and realize what your company can realistically handle. Don’t abuse the power of Groupon or you may find yourself drowning in a sea of cupcakes like Brown.