AfterDawn: News

Another Groupon horror story

Rachel Brown of London has posted her horror story with daily deal giant Groupon.

Brown signed up her 'Need a Cake Bakery' to the site, selling a dozen cupcakes for $10, 75 percent off its usual $40 price tag.



Because the company did not allow her to set a limit to vouchers, 8500 people purchased Groupons - meaning Brown had to create over 100,000 cupcakes.

The baker was forced to hire extra workers and work overtime, overall losing about $20,000 in weeks.

Says Brown (via CNBC):

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.

My poor staff were having to slog away at all hours ? one of them even came in at 3 a.m. because she couldn't sleep for worry. We are still working to make up the lost money and will not be doing this again.

Brown has been running her bakery for 25 years with high reviews.

Written by: Andre Yoskowitz @ 22 Nov 2011 17:12

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• 10 comments

• scorpNZ

  Can't figure out how cutting your price to only a quarter of what you'd normally sell them for,factoring wages,power,ingredients etc that you'd even bother signing up in the first place,surely the no set limit should've had warning bells sounding,i'm self employed even i wouldn't be that stupid to cut my charge to a quarter it wouldn't cover the costs alone
  

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  22.11.2011 18:08 #1

• DVDBack23

  Originally posted by scorpNZ: Can't figure out how cutting your price to only a quarter of what you'd normally sell them for,factoring wages,power,ingredients etc that you'd even bother signing up in the first place,surely the no set limit should've had warning bells sounding,i'm self employed even i wouldn't be that stupid to cut my charge to a quarter it wouldn't cover the costs alone The ONLY point of Groupon, etc, is to get people into the door and retain them as customers for the future, which is highly valuable. However, I fully agree with you here that she completely messed up by selling her product at 25 percent of its value. She could have easily been successful selling at 50 percent off if her bakery was well received.
  

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  22.11.2011 18:30 #2

• ThePastor

  $40 a Dozen? Those had better be some bad-assed cupcakes!
  2 Broke Girls (new TV show) comes to mind! :D
  

  Unfortunately for them, all Blu-ray protections have been broken and BD rips can be found around the Internet, usually before the retail even hits shelves.

  22.11.2011 19:46 #3

• llongtheD

  Originally posted by ThePastor: $40 a Dozen? Those had better be some bad-assed cupcakes!
  2 Broke Girls (new TV show) comes to mind! :D LOL, was thinking the same thing. Maybe if she hadn't been selling cupcakes for over three dollars a piece, she wouldn't even need the site. Even more surprising is that she signed a contract like that without any legal advise. Well what can you do, another small business getting corn holed by a corporation.
  

  If your fish seems sick, put it back in the water.

  23.11.2011 00:27 #4

• dEwMe

  $40...Seriously? I looked at her webpage.. http://www.need-a-cake.co.uk/ and they don't look that special. I'd balk at paying $10 for 12 cupcakes...lol
  
  

  Just my $0.02,
  
  dEwMe

  23.11.2011 13:47 #5

• scorpNZ

  made to order is most probably why,they're not the usual you buy at the local more so with those decorations
  

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  23.11.2011 19:30 #6

• Mez

  High end cup cakes are expensive but may be short lived.
  
  groupon will be going out of business because of stupidity such as this. I hope the cup cake queen learned her lesson.

  25.11.2011 09:21 #7

• Boofer

  Too pricey for my money. Maybe there was some funny herb involved.

  25.11.2011 18:25 #8

• Ryoohki

  Seriously how hard is it to make 12 cupcakes yourself? I looked at the pictures on that website and none of those cupcakes looked all that special. Even 10 bucks is too much for 12 but I can understand it is a steal if you happen to buy stuff from there occasionally. I say its her own fault for listing her stuff on groupon knowing she could get more than she bargained for. If she knew she could not set a limit for vouchers then why do it when there is a good chance you would get swamped with orders. Pure user error imo.
  

  25.11.2011 20:26 #9

• brownieheaven

  wow loosing $20k in a week, thats a huge lost!

  30.1.2013 12:31 #10