BUYER BEWARE - Goupon

If you use the internet at all you are probably familiar with a company called Groupon. This company promotes a daily special at a very low price from a local vendor. Yesterday I received a groupon carpet cleaning offer - 3 Rooms of Carpet Cleaning, normally $144.00, for only $49.00. A savings of 66%. Is this really a good deal for you the consumer?

I too have looked into using Groupon and can report that there are some terrific savings to be had from their website. Each morning I receive a brand new offer from a local vendor offering an extremely low price for their goods and services. Groupon received 43% of each and every sale. In the case of the $49.00 carpet cleaning this would mean that Groupon will receive $21.00 and the cleaning company will receive $28.00 for cleaning (3) rooms of carpeting. It should also be noted that no room can be larger than 200 square feet. Even though you have bought and paid for their services their incredible offer will expire in (6) months. Does this sound like a good deal to you?

Let's assume that it takes (30) minutes to drive to your home and (30) minutes to drive from your home, let's also assume that it will take (60) minutes for the actual cleaning of three rooms or a total of (2) hours. When we divide  two hours into $28.00, this is what the cleaning company received from your $49.00 Groupon, it is an average of $14.00 per hour. Out of this $14.00 the company will need to pay for gasoline, vehicle insurance, liability insurance, maintenance on the vehicle and the carpet cleaning machinery, chemicals for the cleaning, and of course the labor burden (the wages paid to the employee, taxes, workers compensation insurance, unemployment insurance, administration of that employee, etc.).  If this transaction requires (2) gallons of gasoline there goes $7.00 or 25%. How do they make a profit? Without a profit how does a business stay in business? It begs the question, "What type of service are you going to receive for your money?"

According to the Groupon website they had sold 309 cleanings - WOW! 309 jobs times two hours per job is a total of 618 hours. If we divide this into 40 hours which is the average work week this is a total of 15 WEEKS. Remember this Groupon must be used by August 31, 2011 or it expires. There are a total of 27 weeks remaining before August 31, 2011 to complete all 309 cleanings.  Again we must ask the question, "What type of service are you going to receive for your money?"

Zig Ziglar once said, "Good things aren't cheap and cheap things aren't good." I hope this gives you something to think about. If you have questions about this article please email me at paddle@frontiernet.net.

Michael Hull