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Bakery burned by Groupon

by MoneyMagnetMagnate
12 replies
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102,000 cupcakes! Small bakery burned by Groupon - World news - Europe - msnbc.com

Ouch!
  • Profile picture of the author Jay Wessman
    Hahahaha wowzers. The poor staff!
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  • Profile picture of the author rackemup
    Doesn't Groupon offer a way to provide a "ceiling" or limit to how many offers a business wants to sell? I feel for the bakery's owner. Hopefully they'll get more business from the new customers who bought the deal in the future.
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  • Profile picture of the author Sunfyre7896
    The problem is why would she offer such a steep discount? I know times are tough, but she obviously didn't think things through. It's really on her, not Groupon. She probably offered them a price barely over cost, which doesn't make you much anyway and she didn't think that there could be a high demand. Also, the coupon was for 12. A few extra orders probably fills up her oven space. I wonder if there was a limit of one per person as well. If you're going to offer 50%, especially 75% off of something that people like already, you have to know that you could get swamped. Psychologically, people may not even need it, but if they see a big discount, people will just buy the stuff anyway because it's more about the deal then, than whether they actually need it as well as the deal may only last for a short time.

    I feel bad for her, I'm just saying she really didn't think things through and plan for the fallout on this and what was the worst case scenario offering so much of a discount.
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    • Profile picture of the author strangest
      Take it with a pinch of salt. Since when does 12 cup cakes cost £26 . . . over £2 a cake for a small dollop of icing topped sponge. Are they piped with liquid gold lettering, or what?

      Even the Groupon reduced offer of £6.50p is extortionate. Asda, Aldi, Sainsburys, Tesco, etc, etc, . . . your looking at a couple of quid max.
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      • Profile picture of the author rackemup
        Originally Posted by strangest View Post

        Take it with a pinch of salt. Since when does 12 cup cakes cost £26 . . . over £2 a cake for a small dollop of icing topped sponge. Are they piped with liquid gold lettering, or what?

        Even the Groupon reduced offer of £6.50p is extortionate. Asda, Aldi, Sainsburys, Tesco, etc, etc, . . . your looking at a couple of quid max.
        Good point. The price did seem a bit high when I read it. Must be some really expensive ingredients.

        Ok, just read another article and apparently one could customize them "from sponge flavour, icing and decoration options".
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      • Profile picture of the author seasoned
        Originally Posted by strangest View Post

        Take it with a pinch of salt. Since when does 12 cup cakes cost £26 . . . over £2 a cake for a small dollop of icing topped sponge. Are they piped with liquid gold lettering, or what?

        Even the Groupon reduced offer of £6.50p is extortionate. Asda, Aldi, Sainsburys, Tesco, etc, etc, . . . your looking at a couple of quid max.
        Apparently, they normally DON'T cost that much! Funny thing, cupcakes tend to be perishable and NOT ordered months in advance, SO.....

        Brown's Need a Cake bakery, which employs eight staff in Reading, U.K., had to bring in temporary workers through an employment agency to fulfil the orders, at a cost of $19,500 (£12,500) -- wiping out her profits for the year.
        SO, their cost per cupcake went up by over $.20 per cupcake. That's over a 6% cut in profit on their normal price. I don't know HOW much it costs them to make a cupcake, but there IS fuel, electricity, time, materials, spoilage, storage, wages, taxes, pilferage, samples, theft, real estate, etc... HEY, what about VAT TAX? That could be another 30% cut right THERE! OK, that is almost a 40% cut in profit, and we haven't even talked about MATERIALS!!!!

        Steve
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  • Profile picture of the author seasoned
    BTW you know, soldering in electronics used to be a VERY drawn out process. You had to manually cut, mount, and solder EACH LEAD! IMAGINE the work! NOW, BIG companies have what is known as flow soldering. It practically solders ALL at ONCE! Ever see food unwrapped? They do the SAME with FOOD! Of course, it is HIGHLY impractical with FOOD, so they add things to stabilize and preserve the product, and it is NOT custom. Of course, a small bakery can't do all that.

    Talking about movies, ever see cake boss? Some CAKES cost a FORTUNE!

    Steve
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  • Profile picture of the author iidesu
    wow, msnbc brought us another piece of news!
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  • Profile picture of the author HatKing
    Agreed. I think there is a lot of flaw in Groupon's business model.

    My question is: "If you were groupon, what would you do right now to prevent situations like this (or not)?
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  • Profile picture of the author Kurt
    Maybe the bakery was burned by Groupon, but the question cops are asking all over the World is, were the doughnuts burned by the bakery?
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  • Profile picture of the author Cringer
    I have clients that talk about the negative aspects of using a Groupon deal, by referencing stories such as this one.

    Seems the business owners are wise to potential pitfalls in the Groupon/Deal-a-day arena...
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