I was approached by Groupon as well. They have the same business model and they pay you per coupon sold as well. I should have mentioned it.

They all want you to do 50/50. Which I did the first time. Sold 100 ish coupons. 5$ gets you 10$ so I got 2.50 per coupon. Next time I only agreed if they were ok with giving me 65% which they did. And I did 60% with the third company. All together we sold about 600 coupons. The redemption rate is really spread out as it has been a few months already and I have not seen 50% redemption rate yet. Not too hard on the business. Some people do buy over their coupon limit too so it helps offsetting any potential losses. Some people on the other hand will make it as close as possible to 10$. I didn't go with groupon because they are too big and I am worried I would sell too many and hinder the efficiency of the business if we saw too many redemption and would have a hard time handling it. You don't want to loose your regulars either.

That is wrong. I have used Wagjag, Kijijideals.ca and Teambuy to offer deals for my business and you get paid no matter if the coupons are redeemed or not. Some company pay you a lump sum payment as per the % you agreed to, Others spread it over a few months in order to make sure you keep honoring the coupons I guess.

I agree this business model is doomed and unless they reduce their margin drastically, and even then, we will see the end of this sooner than later. My business is a fast food restaurant and I made sure it would cover my food cost because not everyone buying is a new customer. We sold a lot to regulars who would have come anyways. TeamBuy told me about 10% of the coupons end up not being redeemed after a year.

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