Slashdot Mirror
Groupon Deal Costs Photographer a Year's Free Work
Andy Smith writes "One professional photographer in Somerset, UK, thought he was drumming up lots of extra business with a special deal on the Groupon group-buying site. Sadly he has ended up committing himself to nearly a year of unpaid work, plus he has to give out over 3,300 free prints." This analysis seems to be based only on the author's observations (rather than the photographer's experience), but the numbers are interesting. It can't work against everyone, though, or I bet there'd be fewer repeat advertisers on the daily-coupon sites.
TFA doesn't take into account the chance to up sell his products once in the house. These people could be paying £30 to let a salesman into his house to try and fleece them for all he can. It woulnd't be the first time I've heard of this.
Indeed, this has been a known problem for a while. Groupon typically recommends that businesses set some sort of a limit on the number of coupons available, at least during the first try to see what the response is and to verify that you can handle the extra business. While I do have sympathy for business owners that fail to heed the recommendation, it's hardly Groupon's fault if you don't set any sort of limit on the number of coupons being sold.
Now, had this been a glitch on Groupon's side, that would be completely different.
We have offered deals through Groupon and generally a lot of them are given as gifts, and promptly forgotten/binned by their recipients.
This is in fact Groupon's business model. You pay for nothing, they keep the money. The business offering the deal only gets paid when they have provided the service.
Deleted
This just seems like basic business sense: don't enter into unprofitable agreements. The photographer put a limit on the number of these offers. It seems like a reasonable guess that he was better able to do the arithmetic than the article author, who is purely speculating that this came out to a net loss.
I don't believe the author of this article knows what he's talking about in regards to the photography business.
According to his byline, Andrews Smith is a newspaper photographer. You somehow forgot to tell us about your experience in the photography business.
Do you even lift?
These aren't the 'roids you're looking for.
According to this survey, 42% of Groupon SMBs would not repeat. That's quite a lot, and it's from this and cases like this story that I suspect that the Groupon-like business model will not last too long, once the fad has died.
I can't tell who's fail it is. Was it Groupon for not allowing a finite amount of offers to be sold (or notifying the photographer to set a finite amount), or was it the photographer for not gauging his limits as to how many at-cost shoots he can feasibly, and thus setting his "sales limit" too high. TFA shows he sold 301, but was that His limit, or Theirs? I figure it was set by the photographer, and therefore he screwed up by pre-agreeing to do more than he was able.
So is Peter Parker. If Groupon were so evil, why wouldn't Spider-Man be fighting them?
It does't say a professional photographer does it? It just says photoshoot. They could be keeping the interns busy. But a decent chunk of these things never go claimed, and I am sure there are things that they can upsell the groupon buyers on.
I've seen nearly-identical "deals" for photography packages on Groupon before. To be a successful commercial photographer, you need 1) equipment 2) a measure of skill and talent and 3) enough business smarts to make enough money for your time.
The move to digital has significantly lowered requirement #1, equipment. Until an photographer starts building a portfolio and eliciting feedback from others (preferably experienced photographers), they won't have a clue as to requirement #2, their skill level. That lack of understanding hurts requirement #3, knowing what to charge.
So here's how the scenario above will play out. 300 Groupon users will call and make bookings in the near future. The photographer will accept a handful of them at first, and quickly realize what he/she's gotten him/herself into. The photographer will then try to weasel out of the rest of the coupons; pushing available dates into the distant future, cancellations, attempting to disqualify the coupon, attempting to change the terms, stalling, and finally flat our ignoring them. Groupon users will then complain the Groupon, who will eventually get the money back, and everyone will walk away unhappy.
People will be quick to blame Groupon in this case. But its wholly the photographers fault. If you, as a business owner, overcommit your product, your resources, your services, or yourself, you only have yourself to blame.
Disclosure: I've done some work as a commercial photographer, mostly because I enjoy the occasional change from the usual 9-5 IT work. Feel free to hit up the link in my sig.
Was your "Lost leader" a PHB and does he have a particularly bad sense of direction?
If I had an Ass, I'd call it Fanny Bottom, then I could slap my Ass; Fanny Bottom, on the Arse.
In fact, if you look at the small print of the offer it does say "subject to availability", so at any point if the photographer felt that take-up was too high he could have called a halt and said "no more available". He doesn't have to set a limit with Groupon; according to a recent consumer affairs program on UK TV it's not unusual for people to buy Groupon vouchers and have them declined by the business because of oversubscription.
Quidnam Latine loqui modo coepi?
He is, but you're probably getting all your news from the Daily Bugle, which never prints anything good about Spider-Man.
.sig withheld by request
It could also be that "Captured Light" is a group of contracted photographers... their website doesn't list any photographers by name. 10 of them doing 1 month of work each over the course of a year isn't unheard of for promotion purposes. Also, they're probably sending out their juniors who are going underused. Photographers everywhere have been hurting as of late. They could batch up the retouching and printing (or ship that overseas), and reduce the overall cost of the promotion.
It really depends on how big Captured Light is.
The ______ Agenda
I'm afraid my humble blog has again yielded to the footfall of a thousand stampeding slashdotters. One of these days I really should move to a dedicated server, but for now here is the text of the article...
Beware of the Groupon piranhas eating you alive!
This is a cautionary tale for anyone who may think of offering a deal through Groupon, the group-buying site that promises great deals for customers and great exposure for businesses.
The idea is that, as a business, you offer a special deal on the Groupon web site. For example a restaurant may offer a meal-for-two worth £200 for the bargain price of £80. Groupon takes a 50% cut so the restaurant gets £40 which should be enough to cover the actual cost of the food, plus they've had some good exposure and, hopefully, the few hundred people who bought the deal will go back another day and pay full price. Maybe they'll even become regular customers.
But look at what happened to one independent photographer in Somerset:
He offered a £200 portrait package for £29, which was bought by 301 people.
Let's break that down...
Firstly the photographer will only get £14.50 because Groupon takes half. And if the client pays by credit card, which they probably will, then the photographer has to pay the credit card fee, so he's only getting around £12.
Each shoot lasts one hour, but it can be anywhere the client chooses within 15 miles of Bristol city centre. So let's suppose the total time for travel is half an hour each way, plus 20 minutes to set-up lighting and background and 10 minutes to tear it all down at the end. Already he's up to 2.5 hours so he's charging £4.80 per hour, not taking fuel costs in to account.
"Every photo taken will be put on CD or DVD in high resolution" -- this is fairly trivial, let's say 15 minutes work and £1 for the disc and case. He's now getting the equivalent of £4 per hour.
But the deal gets better! "20 of the images will be professionally edited and air brushed" -- now I assume this is nothing more than a bit of spot removal and some minor tweaks, because there's no way you can do a full retouching job as part of a £29 package, and there's certainly no way you can do 20 of them. So we'll estimate a super-speedy 5 minutes per picture and imagine that he somehow gets the whole lot done in 2 hours. He's now on £2.32 per hour.
Anything else included? Yes! You get "one 12x10 framed print, two 10x8 prints, two 8x6 prints, two 5x4 prints, two 4x3 prints, and two 3x2 prints" -- a total of 11 prints, with the largest one framed. I'd estimate the absolute rock-bottom price for producing those prints will be £8 plus another £5 for the frame if he's buying in bulk. That's £13. That's more than he's getting from each client, and he's got 301 clients to make his way through.
Even if this photographer is doing each job to a bare minimum standard, he has committed himself to nearly a year's work for no money. If that doesn't sound like good business sense to you then be very careful if you decide to offer a deal through Groupon or any similar site. What may at first seem like success could very easily put you out of business.
Besides, this guy or we know nothing at all about his business idea. Why does everyone just suddenly think he's some kind of a retard? Oh right, this is the internet..
What if he has calculated that he can make a nice profit by selling them additional services? What if he has some students working for free and he is "outsourcing" the job to them, so that the students get experience and pass the class in school? What if..? You get the idea.
Be it any way, if he has a good enterpreunish idea that the day-job-working newspaper-photographer just couldn't think he might be making good money on this. If he really didn't see it thru fully, he can cancel it and everyone just lost a few minutes. But people should stop thinking that everyone else is an idiot.
He's making a big assumption that the people buying these will buy nothing else from the photographer. It's highly likely that he will stiff them for extra prints/copies on DVD, and/or get a load of extra contracts out of it. I can see the photographer making good money out of this.
"It's possible that it's a group, though with copyright assignment only going to Tim Jones I tend to doubt it."
That is not uncommon. It makes it much easier than assigning copyrights to each photographer@group if you ever have to go to court. Court isn't only for people who try to reprint / copy / claim the work as their own, it is actually more common to have to take someone to court over non-payment for services rendered. I should know, I have a photography business I do as a side job. 9/10 clients are great, they pay on time, don't bitch about every tiny thing and don't try do weasel out of paying for services in any way they can. The last 1/10 is what the courts are for, at least as a last resort.
To err is human; effective mayhem requires the root password!
you have to make a profit for each sale including the coupon.
That's rather difficult, considering that Groupon expects you to slash your price by at least 50%, and then they typically take 50% of the remainder as their commission.
So unless you can turn a profit while charging <=25% of your normal rates/prices, it's best to think of Groupon as an advertising expense—not a business method.
That's why Groupon, at least in my city, has been steadily going down hill. It use to have offers from worthwhile companies. Now it's limited to high margin service sector companies. Groupon is slowly killing itself. I don't even bother checking anymore, and here's why:
- Laser hair removal
- Pet grooming
- Body waxing x3
- Hair electrolysis (hair removal using electricity instead of lasers)
- Sun tanning
- 50% off wine magazines
- Lipolaser fat removal
- Window and Eavestrough cleaning
So Groupon is really targeted at fat, hairy, pasty white people with dirty windows.
He underpriced his offer, but it doesn't have to be a disaster. It's a workflow problem. The photographer gets to schedule the shoots, so he has to get them organized into blocks in the same area. Many people won't have a location in mind, and he can get them to go either to his studio or to one of several pre-selected scenic locations. Once set up in a location, customers can be run through in an hour each. Customers who insist on a specific location have to wait longer for a time slot to open up.
The post-processing work is also a workflow problem. For most shots, a minute or two in Photoshop is enough. Those can be farmed out to an intern, or even some site like GetAFreelancer. The paper printing, DVD making, and framing gets done in bulk, with bids from various companies.
If half the people who bought the coupon actually use the service, and the photographer is organized about it, it's probably about six weeks of work.
The photographer can up-sell. Want hair, makeup,or costuming? Available for an extra charge. Some of the business will be wedding-related, and that's an opportunity to sell a whole wedding package.
Who says he's going to be run out of business?
The guy who wrote the article doesn't know what he's talking about.
I've talked to a good 40 business owners who have used Groupon. Some things that the author of the article totally ignored:
1) Only about half of the Groupons get redeemed
2) If redeemed after the expiration date, they are only good for the face value paid. I.e., if you buy a £200 Groupon for £29, and you don't redeem it before expiration, then you just get £29 off the price of whatever you buy.
3) Upselling is key. For restaurants, when they sell a $40 Groupon for $20, they're betting you're going to come in with some friends and spend $60 to $100 on dinner. I do a lot of work in the recreational activity sector, and there they often do groupons for 50% off a basic package, then once you are there upsell you to a bigger package at full price. In the case of our photographer, if he does it right he'll be getting people to buy £400 or £600 photography packages - "You already are getting all this for £29, look what I can add to it for only £100 more!"
Now, maybe this groupon won't work out great for this one business, but Groupon can work very well if you set it up right and treat it as what it is supposed to be - an advertising/sales lead channel.
paintball
Yes it may be true however businesses don't understand how to use Groupon. It is supposed to be used for marketing/lead generation. In the past, businesses might have had to use newspaper, flyers, to distribute coupons to generate interest. Most of the time these coupons will lead to lower revenue but higher traffic. Groupon takes this a step further by generating revenue upfront. If the coupon is used, then this is no different than the previous method just more high tech. The main difference is that if the coupon is never used (which is expected), both Groupon and the business pocket revenue for very little cost. Even if the coupon is never used, the primary goal of generating interest might succeed as some customers may still patronize the business out of curiosity.
Well, there's spam egg sausage and spam, that's not got much spam in it.
"Cupcake Gallary" (a small Chicago bakery) got stung because Groupon essentially gave them an ultimatum. They declined and Groupon cancelled all the previous Groupons.
http://www.uptownupdate.com/2011/05/groupon-cancellation-cupcake-gallery.html
I think Groupon is a great idea, but this type of bullying douchbaggery to their "partners" is making me rethink ever using them.
My father is a blogger.
Maybe local business owners in your area can start maintaining a shared database or exchanged registry of problem customers especially the deadbeats who don't pay their bills. One business puts a customer on that list, you all refuse to do business with that person. What you would find is that the same individuals cause problems wherever they go. I'm tired of the way asshats never have any consequences. Aren't you?
Hmm, boycotting individual customers. I shall be glad to see how you hope to avoid having to sell everything you own to make a futile attempt to fight off the inevitable enormous compensation payment. Seriously, maintaining a sh*tlist (especially one which you distribute to someone else) is never a good idea, no matter how smart an idea it seems when you start.
FGD 135
I have connections to the professional photography industry, in the form of a now-closed family business.
A comparable print package from a professional lab costs a few dollars. The blogger's estimates are on the high side in that regard alone. The basic airbrushing and editing is a somewhat common freebie from a lab, partly as a way of hiding processing defects (painting over dust spots on the paper). It gets even more disgustingly inaccurate when you factor in the cost of a minilab print. If the photographer owns their own minilab, they can do all their own prints for far less than the blogger's estimating. I'd be surprised if the photographer were actually losing money on this. Maybe not making very much, but certainly not losing.
Then there's the business side. The photo industry is based entirely around the photographer's skill, rather than the actual product. It's the little things that make the difference between a picture that says "Wow, that's a nice portrait!" and "Gee, that guy looks creepy". Things like shadows around the eyes, light balance, a lit background, and even the position of the subject's feet all affect a simple head shot. Full-body photos are more complicated. With today's supply of decent digital cameras and Wal-Mart printers, convincing people to actually pay a professional is constantly getting harder. A ridiculously-cheap deal like this means there's 301 more customers on the area who know of the photographer's service and quality. If even a handful of those come back for a second round, it's a net profit.
You do not have a moral or legal right to do absolutely anything you want.