Why We Do Not Offer Groupon Deals
There are a lot of new photo booth companies out there jumping on the Groupon and Living Social bandwagon. At our head photo booth office more than once a week, sometimes even more than once per day, we get calls asking if we are running any Groupon deals or if we will match a Groupon deal being offered. To the dismay of the caller we always say we cannot match the photo booth offer and that we do not and never will participate in any Groupon type deals. In fact, as harsh as it may sound, we hate Groupon.
First, Groupon makes no financial sense for most businesses. In our case, if our normal photo booth rental price is $650 and we run a daily photo booth deal, Groupon will want us to offer it at $325. As an average consumer looking for a photo booth deal that seems OK for us as a business to get $325 for a photo booth rental. But what many people do not know is that Groupon takes on average more than a 50% cut of the $325 leaving a business with $162.50 minus credit card processing fees. So maybe the photo booth company will profit $150. But wait a second. We still have to pay our attendant, pay for the computers, printers, cameras, photo paper, other supplies, scrapbooks, pens, glue, and travel costs. In reality if we offered a Groupon deal we lose money. That is not good for any small business.
Groupon sells businesses in bringing in returning customers. This is a falsity to say the least for most small businesses. In the photo booth business, 30th birthdays, graduations and weddings are usually one time events and we see few returning customers. Also, most Groupon shoppers are true bargain hunters. We field hundreds of calls weekly at our photo booth office and we notice that some people shop by price only. That is a huge mistake in our opinion. What the shopper does not know is that most photo booth companies priced way below “normal cost” are usually start up companies, that may have one photo booth that has been poorly built in their garage the previous weekend. Their below market pricing is a reflection of their desperate need for sales, any sale.
Most photo booth companies offering Groupon deals are also just plain lazy. Running any small business is hard work. Advertising, marketing, and operating a strategic business plan takes work. Groupon is the easy road for most photo booth companies with little payoff. It is evident that the company running the Groupon deal had not even thought about the implications of the Groupon deal they ran until they fill their entire schedule with events that pay little or nothing and soon they go under or pull no shows, maybe even at your event.
If anyone has run a small business they know how razor thin profit margins may be and Groupon not only takes any margin away it also devalues your entire service in whatever industry you are in. After multiple start up companies offer Groupon deals for 50-65% off it devalues the entire market. In our case consumers come to think a photo booth should rent for around $300 for 5 hours. The problem with that is that if we rented our photo booths for that price we simply could not stay in business. I know every consumer wants a great price on the money they pay but they must think about the cost we have to incur in order to offer you great customer service and a great product.
As a person involved in operating a small business we take pride in the stance that we will never offer a daily deal and we encourage our employees not to participate in Groupon or Living Social type deals even as a consumer. The reason being is that they flat out are not a good deal for the business and the only one who wins is Groupon or Living Social.
For further reading on the slow demise of The Daily Deal read this article: http://tinyurl.com/noToGroupon
Red Eye Photo Booths rents photo booth in over 25 states including Alabama, California, Colorado, Connecticut, Florida, Georgia, Illinois, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Mississippi, Missouri, Nevada, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, Washington D.C and Wisconsin.
Book us for your next event, we guarantee you’ll love it! For any questions on the rental or the photo booth itself visit our website at www.redeyebooths.com or give us a call at 1-(800)-856-6098.