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Baker Has to Make 102,000 Cupcakes For Grouponers

Posted by samzenpus on from the be-careful-what-you-wish-for dept.

Rachel Brown, owner of the small Need a Cake bakery, became a victim of the old adage, "Be careful what you wish for. You might just get it." More than 8,500 people took Rachel up on her Groupon offer of a 75% discount on a dozen cupcakes, forcing her to make over 100,000 cupcakes to fill all the orders. In the end Brown lost almost $20k. "We take pride in making cakes of exceptional quality but I had to bring in agency staff on top of my usual staff, who had nowhere near the same skills. I was very worried about standards dropping and hated the thought of letting anybody down. 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," she told The Telegraph. "We are still working to make up the lost money and will not be doing this again."

122 of 611 comments (clear)

  1. The Law of Unintended Consequences... by CanHasDIY · · Score: 5, Insightful

    The 'Law of Unintended Consequences' strikes again!

    75% off is a seriously deep discount, what did she expect would happen?

    --
    An enigma, wrapped in a riddle, shrouded in bacon and cheese
    1. Re:The Law of Unintended Consequences... by JustOK · · Score: 5, Funny

      I don't think they understood what could happen when the passed that law.

      --
      rewriting history since 2109
    2. Re:The Law of Unintended Consequences... by Anonymous Coward · · Score: 5, Informative

      Nowhere in TFA does it actually say she lost $20k, and in fact the article is from The Telegraph and the business is based in London, so all currency in TFA is in pounds. In fact it says she lost between £2.50 and £3 per batch, which means she lost between £21,250 and £25,500, which would mean she lost close to $40k. More relevant to your comment, she lost £2.50 and £3 per batch selling at £6.50, so it costs her a little over £9 to make a dozen cupcakes which she normally sells for £26, so yes, she has some healthy margins, although not totally unreasonable for food products where you have an awful lot of waste (anything you don't sell by the end of the day is trash). Though I also don't really understand who the hell pays £26 for a dozen cupcakes.

    3. Re:The Law of Unintended Consequences... by The+Pirou · · Score: 3, Informative

      Most baking is on a very low margin because of the bulk batches made by the Baker. Bread, Doughnuts, Pastries, and such can all be under 6% even utilizing 'expensive' ingredients like nuts and fruit. It's laborious, but only requires a few people to have any actual skill depending on the situation because of easy recipes.

      I'm surprised she didn't approach a local culinary school if her cupcakes took such skill to prepare and create.

    4. Re:The Law of Unintended Consequences... by Dr.+Manhattan · · Score: 4, Informative

      Most baking is on a very low margin because of the bulk batches made by the Baker.

      Well, for chain stores, sure. My wife runs a bakery - specialty cake shop - and margins have to be higher because of specialized ingredients, lower volume, personalized decorating, and so forth. It tastes a lot better than the bulk-produced stuff you get at Costco or Sam's or even the grocery story, but it costs noticeably more, too.

      --
      PHEM - party like it's 1997-2003!
    5. Re:The Law of Unintended Consequences... by Half-pint+HAL · · Score: 2

      They're a direct-to-customer operation -- there's no wholesale step. It's not a fully automated industrial bakery, and that's part of their attraction to the clientele. The loss of efficiency is partly offset by the lack of middlemen.

      --
      Got them moderator blues I blieve I walk out the do', With these mod-points I been gettin', I 'most never post no mo'
    6. Re:The Law of Unintended Consequences... by LordCrank · · Score: 2

      Groupon only gives the actual vendors half the money, so if a groupon user paid £6.50 the retailer would receive £3.25, so she was spending about £6 to make a dozen cupcakes and charging £26. Those are indeed some very healthy margins.

    7. Re:The Law of Unintended Consequences... by TVDinner · · Score: 5, Insightful

      I owned a mall-based cookie/cafe store and also a pretzel store. Margins on meal normally run 3x-4x the cost of ingredients to account for labor, electricity, waste, etc. that the poster stated above. But the margin on bakery goods depends on the holding time of the good. The longer the item lasts, the lower the margin needed. On the cookies we sold, the holding time was 3-4 hours and the margin was around 6x-7x. For pretzels, the holding time was 30 minutes and the margins are around 30x-40x. That pretzel you buy at the mall is SERIOUSLY cheap to make, but you throw them out ALL the time because they get stale so quickly. My favorite item to sell was bottled water. Lasted basically forever and and I made 10x margin on it; even better than my fountain drinks. And believe me, it's true when they say most of the profits a store makes is between Thanksgiving and Christmas. the busy season at the mall really helps because you crank out goods and your not throwing stale items away like you do during a normal period.

    8. Re:The Law of Unintended Consequences... by poetmatt · · Score: 5, Insightful

      so basically, she made a completely moronic business decision, but the article's slant is that it is the fault of groupon? Is this woman not aware she could have set these at a price that would have been reasonable as opposed to bankrupting?

    9. Re:The Law of Unintended Consequences... by The+Pirou · · Score: 4, Interesting

      I've only ever baked for 'mom and pop' affairs, so I wouldn't know about chain stores. The first time was for a boss who started with $500 and 2 credit cards 18 years ago and turned it all into a well known gourmet market in the Atlanta area. Another time was for another well known DIY restaurant/bakery in town.
      My mother was a pastry chef who has made cakes similar to those on the website of your wife since I was 3 years old. I know the costs and labor involved to make make breads, cakes and other assorted patisserie fair. There is still an insanely low margin on baking using 'fancy' ingredients.

      As for Groupon...Groupon costs a lot in food costs, and 2 years later I hadn't seen any significant change in sales that could've been attributed to their involvement.

    10. Re:The Law of Unintended Consequences... by jimicus · · Score: 2

      She couldn't. Groupon won't run the deal unless it's fantastically good - on the order of 60-80% off. On top of that they then take 50% of the coupon cost.

      In theory you're supposed to keep the details of all the customers and sell them stuff at a later date - though lots of businesses have reported that this can be nigh-on impossible. The sort of customer who takes you up on a 75% offer is frequently the sort of customer who would never pay full price under any circumstances.

      What she should have done was limited it to 100 customers. But I'm given to understand Groupon have this habit of using all sorts of high-pressure tactics to assure you there's no way you'll wind up with more customers you can cope with, and under these circumstances it'd be silly to limit it to 100 customers when prospect number 101 could be the one who keeps coming back.

    11. Re:The Law of Unintended Consequences... by Local+ID10T · · Score: 5, Informative

      I've used Groupon for my business.

      The idea is to consider it a marketing expense -you are paying for customer eyeballs (our estimate was we were exposed to 400,000 customers who had never heard of us before), not expecting to make a profit on the items that the Groupon customers buy.. but you don't want to actually LOSE money on any sales.

      --
      "You want to know how to help your kids? Leave them the fuck alone." -George Carlin
    12. Re:The Law of Unintended Consequences... by JWSmythe · · Score: 2

      8,500 people took the offer. the story says £2.50 to £3.00 per dozen loss. That's £21,250 to £25,500 loss. She had to hire on extra staff at £12,500.

      Her ad was: "Twelve Cupcakes with a Choice of Flavours and Designs for £6.50 from Need a Cake (Value £26)" I won't try to guess her profit margin, as that would be total guess work. We can calculate that she would have expected £221,000, but only was paid £55,250. That doesn't include any charges that Groupon may have charged her to run the ad.

      I've seen other stories on the topic. Groupon pushes for unreasonably low prices, to be a loss leader. It does drive business, but does not usually result in other sales. It's dirty marketing that ends up hurting the businesses that they are servicing.

      Sure, she should have stuck with £1 over cost (including staff and utilities). They hard sell to get you to drop your price as low as possible. It's inexperienced business people falling for a great sales pitch and promises of huge returns. It does Groupon good, where they will keep membership interested. For the cupcake shop, they may end up closing the doors.

      --
      Serious? Seriousness is well above my pay grade.
    13. Re:The Law of Unintended Consequences... by Rary · · Score: 5, Insightful

      so basically, she made a completely moronic business decision, but the article's slant is that it is the fault of groupon? Is this woman not aware she could have set these at a price that would have been reasonable as opposed to bankrupting?

      From TFA:

      Mrs Brown, who had only expected a few hundred orders, said that the experience was “without doubt, the worst ever business decision I have made”.

      Sounds like she's well aware that she made a bad business decision. What the article doesn't clearly state is what options Groupon provided her in terms of prices she could offer or limitations on the number of groupons sold. At the end of the article, a Groupon representative says that there was no limit placed on the number sold, and that "(w)e approach each business with a tailored, individual approach based on the prior history of similar deals." This doesn't really tell us much, but it is entirely possible that Groupon sold Mrs. Brown on the idea by providing her with unrealistic expectations based on "prior history of similar deals".

      It's also possible that she isn't actually blaming Groupon at all. The article makes that claim, but the quotes from Mrs. Brown only talk about her own underestimation of the response to the deal.

      --

      "You cannot simultaneously prevent and prepare for war." -- Albert Einstein

    14. Re:The Law of Unintended Consequences... by Colonel+Korn · · Score: 2

      so basically, she made a completely moronic business decision, but the article's slant is that it is the fault of groupon? Is this woman not aware she could have set these at a price that would have been reasonable as opposed to bankrupting?

      I agree that GroupOn isn't to blame here. Almost any time a business gets involved with Groupon it's a big mistake. The alternative is to set up Groupon deals that aren't actually any cheaper than normal rates, in which cases it's the customers who lose. It's possible to find a win-win through Groupon, but it seems that in the vast majority of cases Groupon should be avoided.

      --
      "I zero-index my hamsters" - Willtor (147206)
    15. Re:The Law of Unintended Consequences... by LordKronos · · Score: 5, Informative

      The fault of GroupOn is an inability to set limits in the number of coupons issued....If GroupOn allowed a limit to the number of coupons, say 2,500 then she many not have needed the extra employees and not suffered the losses from it.

      You are absolutely right....except for that fact that you are absolutely wrong. Groupon DOES allow limits. I know I've intended to buy a groupon before but waited before purchasing, and when I later came back, the deal was over BEFORE the expiration because it reached the max quantity. Don't believe me? How about from the Groupon CEO himself:

      http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2010/09/17/businessinsider-groupon-ceo-posies-2010-9.DTL#ixzz0zp2ktgaQ

      Also, to clarify one important point: it has always been Groupon policy to allow merchants to cap deals. If a merchant sells too many Groupons, they’ll have a bad experience, the customer will have a bad experience, and therefore, Groupon loses. We’re longer-term thinkers than that. In fact, we have the opposite problem more often – where merchants protest a cap we recommend, convinced they can handle more customers than we think they can.

    16. Re:The Law of Unintended Consequences... by sjames · · Score: 2

      Don't forget Groupon takes half, so she was selling at 12.5-percent retail.

    17. Re:The Law of Unintended Consequences... by ColdWetDog · · Score: 5, Funny

      I owned a mall-based cookie/cafe store and also a pretzel store.

      OK, I'll bite (so to speak)

      How did you end up with the handle "TVDinner"?

      --
      Faster! Faster! Faster would be better!
    18. Re:The Law of Unintended Consequences... by blair1q · · Score: 2, Insightful

      A limit is self-defeating. If you want one person to get a 75% discount, you might as well want everyone who gets a chance to get a 75% discount.

      Groupon's issue is that it's aggressive about marketing these overgenerous discounts to merchants. So her mistake was engendered by their suggestions. If Groupon used its statistical information wisely, they'd have guided her to a discount level that would get her a reasonable increase in business, not a flood.

      But Groupon doesn't really care if the merchant is happy. It's trying to sell stock, and what sells stock is gaudy revenues for itself.

    19. Re:The Law of Unintended Consequences... by gl4ss · · Score: 2

      You know how groupon has gained it's volume? by dumping shitloads of money on salesmen who sell these deals to the shops, salesmen who don't give a fuck if it makes sense for anyone involved, it doesn't even make sense for groupon(they're losing money!!). but volume == bubble == _investor_ money , right?

      so there should have been a limit and the groupon guy should have told the shopkeeper to add a limit.

      groupon is ridiculously priced company for doing so BAD BUSINESS..

      --
      world was created 5 seconds before this post as it is.
    20. Re:The Law of Unintended Consequences... by blair1q · · Score: 2

      On the other hand, they have thousands of people who will likely come back and average-up that margin, and they're now world-famous.

      Best $40k that lady ever spent on her business, I'm guessing.

    21. Re:The Law of Unintended Consequences... by Rary · · Score: 5, Insightful

      Well yes, he claims that it has always been Groupon's policy. Of course, that was stated in response to a particular case in which the business owner claimed that Groupon refused to allow a cap on the number of groupons sold.

      We can't be sure what deals and limitations the various groupon salespeople actually present to retailers, but it's completely naive to think that Groupon is completely blameless in cases like this simply because the CEO issued a sympathetic press release.

      --

      "You cannot simultaneously prevent and prepare for war." -- Albert Einstein

    22. Re:The Law of Unintended Consequences... by blair1q · · Score: 2

      You either don't know how math works, or don't know how sales works.

      She could have set a lower discount, still set no limit, got fewer takers, but got a better class of takers (those who were interested not just because of the size of the discount).

      She would then (a) profit from every cupcake sold even though she was offering a discount and (b) profit even more from repeat business.

      Groupon should care about anyone who they serve, whether it's the merchant or the consumer. But they don't. They only care about shovelling in numbers so they can bedazzle Wall Street.

    23. Re:The Law of Unintended Consequences... by DaveGod · · Score: 2

      The costing quote isn't very useful as it doesn't make clear what they're counting or whether it's incremental.

      Also, in the UK - and particularly for boutique shops - rent and other overheads can be a substantial proportion of costs. This results in a situation where scale makes things interesting. I can explain the situation faced by our shopkeeper and also why the figures do not appear to add up, but I only know how with an illustration. So, say:

      normal sale price £26
      average ingredients £7
      average worker per batch £8 (remember these are boutique, the whole point is the time spent with the icing)
      contribution to overheads and profit per unit = £11 (appears to be 42% gross margin)

      rent say £24k pa
      admin & other overheads say £50k pa
      therefore break-even point at (24k+50k)/11= 6,727 dozens.

      Now at normal capacity 10,000 dozens, a reasonable £36,003 profit is made.

      So what happens if you have a Groupon code, whereby maybe 2,000 extra cupcakes are sold at £6.50? I assume that existing customers don't notice the discount so normal sales are unaffected, quite plausable for a boutique shop. OK so overheads are fixed and already paid for right, so there's a loss of £11-£6.50=£4.50, * 2,000 = £9,000, right?

      Nope. Really production wages are semi-fixed. Staff have contracted minimum hours and are only willing to do so much OT, there's a limit to how long cupcakes will store for, you always need to cover for sick time... In a big corporation this comes out through scale, in a small boutique shop it doesn't. So actually there's extra capacity to cover your 2,000 and the loss is actually £7-£6.50 = 50p, * 2,000 = £1,000. Maybe you need one or two extra shifts but a £2,000 loss is worst-case and still a bargain for the advertisement: you'll make that back plus some profit if 10% of them come back ONCE at full price.

      And if those 10% of them actually come back ~3 times per year each, you can probably hang onto using up much of that excess capacity so you should be looking at £26-£7 * 200 units *3 = £11,400 per year. Nice.

      But what happens when 8,500 new orders come in? All your excess capacity is burned by the first 2,000 units. The next 6,500 have the full 7+8=£15 cost per batch! Now you're losing ((15-6.50) * 6,500) + that £2,000 = £57,250. Actually it's probably worse than that because you're having to find temp labour fast, so they'll cost more, and frankly they won't be half as good as your regular staff, taking longer, more wastage...

      Of course if 10% of those guys come back once you're laughing, but it's less likely. Those temp workers really couldn't do what makes your boutique shop special. Such a big influx is much more likely to be cannibalising sales too. It's also more likely to be coming from wider afield - people less often travelling nearby to buy from you, or who already shop at a local competitor.

      This shop owner may well have made smart, well informed decisions all the way but for one critical one. I think we should forgive her that too, our hindsight is 20-20 but in her day-to-day an extra 8,500 orders would seem ridiculous.

    24. Re:The Law of Unintended Consequences... by Grishnakh · · Score: 2

      Since you say you used to own a mall-based food store, maybe you can answer the following question for me. I'll understand if you have no idea, but since you'd know something about mall rents, maybe you'll have a clue:

      How the hell does Radio Shack stay open? I never see any customers inside those stores!

    25. Re:The Law of Unintended Consequences... by adolf · · Score: 3, Funny

      Hmm.

      I think it was me that was keeping Radio Shack alive. I, until very recently, used to buy 1:1 audio isolation transformers exclusively from Radio Shack. They were about $4, which is very reasonable for quantities of 1, and were of consistent quality for decades. (They get used for projects at work, so I try to keep a few around.)

      Why have I stopped buying them there? Because approximately 1 month ago, they stopped carrying that part and do not list a replacement.

      I have subsequently noticed that the Radio Shack in the mall has closed. Coincidence?

      --
      Kid-proof tablet..
  2. And the moral of today's story is... by RogueyWon · · Score: 5, Insightful

    ... be careful about the special offers you advertise online. Groupon isn't at fault here - if anything, the complaint is that it did its job too well. If you put a sign in your window offering a special offer, you can take it down whenever you want. If you stick something out on the net, you need to be very sure that you can handle a bit of scaling around the response.

    Still, full credit to the bakery for actually meeting the orders. I suspect lots of far larger retailers would have tried to weasel out of the deal they'd offered in a situation like that. And so far as I can see from TFA, nobody is talking about lawsuits.

    1. Re:And the moral of today's story is... by marcosdumay · · Score: 4, Informative

      Just replying to myself... Groupon does set that limit, and the fault is doubly with the retailer.

      --
      Rethinking email
    2. Re:And the moral of today's story is... by Anonymous Coward · · Score: 5, Informative

      Other sellers have reported that the Groupon salespeople do their very best to convince companies not to put any cap at all on the amount of product available, downplaying the probability of just something like this.

      This is hence similar to a lender trying to get someone to maximise their borrowing. You could argue that the bakery as a company is a professional business and has no excuse - on the other hand you don't expect bakeries to be masters of internet marketing either. It would make you legally correct and a jerk.

    3. Re:And the moral of today's story is... by canajin56 · · Score: 2

      They do. You can limit them to X total coupons sold. You can also make them "one per customer" although customers will get violent if you try to enforce that just because it says so on the coupon.

      --
      ASCII stupid question, get a stupid ANSI
    4. Re:And the moral of today's story is... by dcw3 · · Score: 2

      Unfortunately, various people with marketing degrees tell me that this isn't an economically viable way to do things. Apparently nowadays, you have to accept thieves into your store with open arms.

      Why are you asking the thieves? While I'm stereotyping here, so much of marketing today is about getting people to buy stuff that they have no reason to purchase. Every commercial seems to either use sex, or tug at heart-strings to tell you how it's going to save the children/environment/whales/grandma/handicapped. I tease my MBA spouse about it all the time.

      --
      Just another day in Paradise
  3. Limits by heypete · · Score: 4, Interesting

    I seem to recall reading that Groupon allows businesses to limit the number of offers available. That is, rather than having to deal with 8,500 orders, Ms. Brown could have limited the offer to 100 (or some other arbitrary number) people.

    If my understanding is correct and such a system exists, it would be foolish for a business to not use it.

    1. Re:Limits by Anonymous Coward · · Score: 5, Informative

      It's in groupon's interest to not let the client do that. They get vast sums of money from these "deals" and they know the system doesn't do the small business any good, because the couponers are pretty much all piss taking free loaders.

    2. Re:Limits by maeka · · Score: 2

      It's in groupon's interest to not let the client do that. They get vast sums of money from these "deals" and they know the system doesn't do the small business any good, because the couponers are pretty much all piss taking free loaders.

      Not only does Groupon allow businesses to set a limit, it very clearly is in Groupon's best interest to do so.
      If Groupon partners overextend themselves and deliver shitty service nobody will use Groupon.

    3. Re:Limits by Loether · · Score: 5, Interesting

      My wife uses Groupon all the time and so by extension I use Groupons. I hate them for precisely the GPs reason. Retailers ask if you are using a Groupon. If you say yes you almost always get substandard treatment/products. The companies who use Groupon overextend themselves and then hire temps or decrease quality to cover for their mistake. It's bad for businesses and bad for customers. The only one it's good for is Groupon.

      --
      TODO create witty sig.
    4. Re:Limits by datavirtue · · Score: 2

      I just buy off-brand stuff and forgo the waste of time.

      --
      I object to power without constructive purpose. --Spock
  4. Stupid is as stupid does. by pyite · · Score: 4, Insightful

    I may hate Groupon, but this person has no one to blame but herself. Do the math. If you sell that many coupons, even if only a fraction of them are redeemed, that's a lot of cupcakes.

    --

    "Nature doesn't care how smart you are. You can still be wrong." - Richard Feynman

    1. Re:Stupid is as stupid does. by Anonymous Coward · · Score: 5, Insightful

      I may hate Groupon, but this person has no one to blame but herself. Do the math. If you sell that many coupons, even if only a fraction of them are redeemed, that's a lot of cupcakes.

      The point is that promoting your business via Groupon is very often a big mistake, unless you have a lot of perishable unsold inventory.

      Selling via Groupon doesn't do much to build your business, since most Groupon buyers are cheap - instead of looking to become regular full-price customers, they will look for the next Groupon.

      The customer is loyal to Groupon, not the businesses that sell via Groupon.

    2. Re:Stupid is as stupid does. by zazzel · · Score: 2

      The customer is loyal to Groupon, not the businesses that sell via Groupon.

      Any of these marketing devices do that. In my city, you can buy a coupon book for a (rather long) list of restaurants (usually two meals for the price of one). Behaviour? You buy the book, take your s.o. and then visit every place exactly ONE time. The book will last you a year. Next year: same procedure.

      The restaurants in there put themselves in a horrible position, since they have no repeat customers. If they drop quality, they will have bad reviews, too! So it's only profitable for restaurant owners who did not think long enough about "location, location, location".

  5. Just 102k? by DWMorse · · Score: 5, Funny

    I'm sure she can do it. It'll be a piece of cake. 102,000 pieces.

    --
    There's a spot in User Info for World of Warcraft account names? Really?
  6. Geez... by Ron+Harwood · · Score: 4, Informative

    Are people bad at math or something?

    From their FAQ:

    Can I set limits on my deals?

    Yes. You can limit the total number of purchasers. You can also set restrictions on how customers use the deal. For example, if you're a restaurant you can limit the use of Groupons per table or per order.

    --
    BlackNova Traders
    1. Re:Geez... by Fujisawa+Sensei · · Score: 4, Insightful

      Yes, people are very bad a math.

      As evidence I cite MegaMillions, Power Ball, and the continued existence of Vegas with its billion dollar hotel/casinos.

      --
      If someone is passing you on the right, you are an asshole for driving in the wrong lane.
    2. Re:Geez... by MozeeToby · · Score: 3, Insightful

      Math and lotteries only don't work out if you base your math on the idea that $100,000,000 is worth 100,000,000 x $1. It is not. Above a certain number, large sums of money become "anything I want and never have to work again" which people value at much more than 100,000,000 times "a cheap cup of coffee".

    3. Re:Geez... by Dog-Cow · · Score: 3, Insightful

      A lot of people gamble for the fun of it, you know. There is value to the thrill of potential winnings, and that value may very well be greater than the dollar amount spent.

      Granted, there are a lot of suckers too, especially in Vegas.

    4. Re:Geez... by Tyler+Eaves · · Score: 4, Informative

      Actually, you've got it exactly backwards. Marginal utility of each additional $ goes DOWN as the amount goes up.

      Look at it this way - Say I give you $1,000,000. For most people, this is absolutely life changing - pay the house off, do what you want for a few years, generally be secure. Now say let's flip a coin, double or nothing. Unless you are already quite rich, you should NEVER take that bet - $2m would be nicer, sure, but compared to the difference between $1m and $0, it's no where close to being twice as good.

      If the amounts go up a lot - to Bill Gates $1m would be essentially meaningless.

      --
      TODO: Something witty here...
    5. Re:Geez... by Fujisawa+Sensei · · Score: 3, Interesting

      The math for the odds of winning powerball are 1 in a hundred million. (1 in a hundred M, 1 in 130 M, 1 in 200M same difference, roughly. ) and each dollar you spend increases those odds to $x in 100 million.

      According to today's XKCD you need to have over 4 million in investments, which mean that the only prize that really counts for never having to work again is the big one.

      So your odds of winning and never having to work again are very small until you start spending millions of dollars on tickets.

      --
      If someone is passing you on the right, you are an asshole for driving in the wrong lane.
    6. Re:Geez... by Nom+du+Keyboard · · Score: 5, Insightful

      Yes, people are very bad a math.

      As evidence I cite MegaMillions, Power Ball, and the continued existence of Vegas with its billion dollar hotel/casinos.

      You don't understand that buying a lottery ticket is more than just owning an almost non-existent chance of winning enough money to actually change your life. It is the opportunity to spend a buck or two and spend several very pleasant days fantasizing about what life would be like if you do win. Seen that way, it isn't a bad bargain at all. It's certainly better than spending that couple of bucks on some high fructose corn syrup favored carbonated water that's tough on your liver, metabolism, and overall health.

      --
      "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
    7. Re:Geez... by Firethorn · · Score: 4, Insightful

      Unless you are already quite rich, you should NEVER take that bet

      Yeah, but GP's point was that human's math sense is broken at those high levels. Those who can handle the differences and have certain other traits are the ones who get to be rich.

      Those who's math sense is broken worse than average are the types buying lottery tickets as a retirement strategy.

      Yes, the marginal utility of the next $ when NetValue=$1M is much less than when NV=$1. But humans typically don't think that way.

      You're doing pretty good if you can conceptualize that a million bucks is just a million bucks.

      --
      I don't read AC A human right
    8. Re:Geez... by rjstanford · · Score: 2

      Another way of looking at it is like this.

      Buying no tickets costs $0 and gains you nothing, and you have absolutely no chance of winning.
      Buying one ticket costs $1 and gains you a pleasant few minutes of fantasy. Might be worth it, might not. It also gives you a real (yet tiny) chance of winning.
      Buying ten tickets costs $10 and gains you the same fantasy, but at 10X the price. You still have only a tiny chance of winning.

      Bottom line - buy no tickets, or one ticket, but never more than one. There's no gain.

      --
      You're special forces then? That's great! I just love your olympics!
    9. Re:Geez... by Quila · · Score: 2

      It's only being bad at math if a person expects to win.

      Playing for the hell of it or for the thrill of watching the drawing with money on the line is just fine. You paid your money for this form of entertainment just as you would have paid for any other.

    10. Re:Geez... by TheLink · · Score: 2

      Regarding the lotteries, think about it from this POV:

      The odds of the typically poor people who buy lottery tickets becoming super rich multimillionaires if they didn't buy lottery tickets but instead tried other ways, is probably lower than if they did buy lottery tickets :).

      I generally don't buy lottery tickets[1], and I think the odds of me becoming one of those super multimillionaires are practically zero.

      Yes there are some poor people who become multimillionaires through hard work and some luck. But there many millions who wouldn't. Believe me, there are lots of hardworking poor people. Some even try to start businesses and unfortunately don't succeed. They don't go around selling books titled "How I kept trying, failing and somehow still never succeeded"[2].

      That said, yes you can probably be a millionaire if you didn't start off too low and didn't screw up too badly. But you still won't be "I won the lottery" rich.

      [1] Once in long while I buy them when the jackpot has accumulated (due to nobody winning) enough that if you actually could buy all of the possible numbers, you'd still make money (assuming not too many bought the winning numbers ;) ). When this happens it's called investment not gambling ;).

      [2] By the way, I'm sure you've seen those books where one rich guy says he succeeded by not giving up. Then you have another book where a rich guy says he succeeded by knowing when to quit. Then you have another rich guy saying he succeeded by starting many different businesses at the same time and closing down the ones that don't succeed. Then you have yet another rich guy saying he succeeded by focusing on one thing... Another rich guy says "buy property", but if you bought the wrong property < 2008, you'd now be stuck paying off a loan that's a lot more than your property. So go figure.

      --
    11. Re:Geez... by JaredOfEuropa · · Score: 2

      Do you have insurance? I bet you do... and it's almost the same thing; you are just betting on something bad happening to you (and probably hoping that it never happens). But in the end, insurance companies are not charities; they make money and plenty of it. On average, you will pay more in premiums than you will ever get back in claims, just like gamblers. So: don't gamble with money you cannot afford to miss, and don't take out insurance unless you cannot afford to self-insure.

      Math isn't the whole story; the simple fact is that it is never about the averages / expectation value (though it will help you find the better deal for your dollar). Insurance buys you peace of mind. Gambling gives you a small chance at winning more money than you could possibly amass in your lifetime with hard work. Both these things have value.

      --
      If construction was anything like programming, an incorrectly fitted lock would bring down the entire building...
    12. Re:Geez... by thesandtiger · · Score: 2

      Hell, I value the fun discussions with my friends about what kind of crazy things we would do with $100,000,000, the day dreams about winning, and the jolt of adrenaline when checking for a (hah!) winner more than I value a dollar.

      For $1 a week I get to have all that and marginally support my local schools. Not many things as fun you can have for under 15 cents a day...

      With Vegas, too, it's actually quite easy to come out ahead:

      - Go to a casino that gives you a free drink if you put $20 in a machine. Put $20 into a dollar slot, get your free drink, play a single game, cash out and move on to the next casino (or to a different part in that casino). Do it with friends, do it while people watching and it's a good time had for quite a low cost.

      - Go to a decent hotel/casino, put a few thousand dollars on deposit, enjoy your "free" suite on the house - nobody says you have to gamble.

      Cheap in the way a Grouponer is cheap!

      --
      Since I can't tell them apart, I treat all ACs as the same person.
    13. Re:Geez... by mr1911 · · Score: 3, Insightful

      Yes, people are very bad a math.

      As evidence I cite MegaMillions, Power Ball, and the continued existence of Vegas with its billion dollar hotel/casinos.

      The common refrain "the lottery is a tax on those bad at math" is incorrect.

      The correct euphemism is "the lottery is a tax on hopelessness". For $1, they get a sliver of hope they will change their lives and live happily ever after.

      Go ahead and cite math. Go ahead and point out that lottery winners often blow through their winnings rather quickly and wind up no better than where they started. Go ahead and talk to yourself since logic and reason take a back seat to emotion with most people.

      --
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      Any offense taken to this post is at your sole discretion.
    14. Re:Geez... by tompaulco · · Score: 2

      What do you mean? With odds of 1 in 250 million for winning powerball, I just have to buy 250 million tickets to win that 100 million jackpot!
      No, the other people are still going to pay, so if you buy 250 million tickets, you will have a 50% chance of winning 100 million. Oh, that's $50 million if you take it as lump sum. $25 million after taxes. So, expected value of spending $250 million on powerball tickets is $12.5 million.

      --
      If you are not allowed to question your government then the government has answered your question.
  7. doh! by sgt+scrub · · Score: 3, Funny

    Let them eat cupcake?

    --
    Having to work for a living is the root of all evil.
  8. Very common by tripleevenfall · · Score: 5, Informative

    Stories in the press abound of small business retailers, particularly restaurants, living to regret making an offer on Groupon. These entities live on forming relationships with customers. Groupon brings in people who are only there to eat on the cheap and won't likely return.

    Example story: http://posiescafe.com/wp/?p=316

    "we met many, many terrible Groupon customers customers that didn’t follow the Groupon rules and used multiple Groupons for single transactions, and argued with you about it with disgusted looks on their faces, or who tipped based on what they owed (10% of $0 is zero dollars, so tossing in a dime was them being generous). "

    1. Re:Very common by TheLink · · Score: 4, Interesting

      I personally think the concept of near "compulsory" tipping as practiced by restaurants in some countries is messed up.

      At work I don't get tipped for just doing my job, and if my company's customers gave me money directly for just doing my job, or for doing my job differently/better than normal, that's called corruption or just plain wrong. Heck at some places you're not allowed to accept gifts/$$$ above a certain value (usually low, sometimes even _zero_) from customers.

      In theory if your employer isn't paying you enough to do your job, you should find another employer or another job. But in practice the "tipping" system is not likely to change in those countries...

      --
    2. Re:Very common by Tenebrousedge · · Score: 2, Insightful

      In e.g. Ohio, the legal minimum wage for tip-earning workers is a miserable fraction of the normal minimum wage, and employers do not have any obligation to improve that. The American way is to fucking tip your waitstaff, because that's their primary income. They're lucky if they don't have to split their tips with the house, or other servers.

      You think minimum wage ought to be enough for anyone? Wake up and smell the 21st Century. Not tipping your wait staff isn't your private revolution: it simply makes you a sociopath of the meanest degree.

      --
      Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.
    3. Re:Very common by afabbro · · Score: 2

      Mr Pink, is that you?

      --
      Advice: on VPS providers
    4. Re:Very common by residieu · · Score: 4, Insightful

      Mr. Pink's rant wouldn't be funny if he didn't have a point.

  9. She's doing it wrong. by liquidweaver · · Score: 4, Funny

    She should take a hint from KFC, not fulfill the promise, and just delay it in courts until it turns into a $3 coupon years later that requires OCD record keeping to capitalize on.

    Oh wait, this is a small business, those don't hold voting rights in our corporatocracy.

    --
    mov ah, 4ch
    int 21h
    1. Re:She's doing it wrong. by drb226 · · Score: 3

      Slashdot is in desperate need of the "sad, and yet funny, and yet so disturbingly true" moderation vote, if only for this comment.

  10. Re:When will businesses realize by spire3661 · · Score: 5, Informative

    The conversion rate for grouponers is abysmal. They are locusts out swarming for the next deal.

    --
    Good-bye
  11. Re:Bussiness 101 by Anonymous Coward · · Score: 2

    "For the first 100 people" would have been a good stipulation on that groupon. That would actually serve the purpose of the offer. The first 100 would get cheap cupcakes sure, but the following of people after the first 100 would likely buy cupcakes anyway without the coupon because of the "well, im here, might as well" attitude a lot of people have.

    I don't think you understand how groupon works. They don't go in to the store to buy the coupon. Everyone who comes after the first 100/200/1000 would just be like "oh, i can't buy a coupon.. oh well, " and never think about the vendor again. and that's if they don't harbor some grudge.

    - too lazy to sign in

  12. Re:Bussiness 101 by MozeeToby · · Score: 2

    You should probably look up how Groupon (and the other coupon deal sites) work. Customers purchase a coupon from the Groupon website, which is then redeemed at the retailer or restaurant. So, if the deal is "$20 worth of steak for $10", the customer pays Groupon $10, prints out the coupon, goes to the market, and redeems the coupon for $20 worth of steak.

    What you can do, is tell Groupon to only sell X number of coupons. But then, that doesn't drive customers to your store the way your thinking above does. People would simply go to Groupon, see that it's sold out, and never think about it again.

  13. Groupon's fault by Maximum+Prophet · · Score: 4, Insightful

    I don't see how Groupon can be considered long term viable, if this is the kind of press they're getting. This lady will never be doing that again, and she's going to go to her local chamber of commerce meetings and say, "I had a bad experience with Groupon". Any salesperson from Groupon will have an uphill battle selling to anyone in that area again.

    How hard would it be for Groupon to make the default limit be a small number? If the business selects a large number with a large discount, then their forms could ask, "Can you really service this number of customers over this time?"

    I know it's easy to blame the baker for this mistake, it's not a viable business strategy to kill your customers. Customers are supposed to be bled slowly, so that you can bleed them some more tomorrow.

    --
    All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
    1. Re:Groupon's fault by caladine · · Score: 2

      I don't see how Groupon can be considered long term viable, if this is the kind of press they're getting.

      Additionally, I imagine there are quite a few people like me out there who only use groupons with businesses I already patrionize regularly. I find myself waiting for the next groupon to show up before purchasing what I would have gotten without it anyway. Great for Groupon, but not so great for the business in question. Doesn't much sound like a sustainable model to me.

  14. Re:When will businesses realize by CubicleView · · Score: 2

    I think it must really depend on the deal being offered. Groupon were spamming me every day about some (expired :S) mattress deal recently. I can’t imagine that offer would lead to much repeat business from a typical /. user, since they don’t tend to wear a matress out that quickly... However I did find a nice restaurant recently because of a discount I purchased from a different company, and I would definitely consider eating there again even without the discount. The same could be true of these cupcakes, if they’re good value without the discount, it should definitely lead to new business, just maybe not 20Ks worth...

  15. expensive cupcakes by MasaMuneCyrus · · Score: 3, Interesting

    £26 per bakers dozen cupcakes!? Is this a normal price? That's $40! Are these normal prices in London?!

    1. Re:expensive cupcakes by spire3661 · · Score: 4, Informative

      Its this new metropolitan area fad of upscale cupcake stores. Ive had a few 'gourmet' cupcakes from one in Laguna Beach. It was ok, but not worth the $4 i paid for it and I'd never go back.

      --
      Good-bye
    2. Re:expensive cupcakes by AngryDeuce · · Score: 4, Insightful

      Two pounds a piece? Four dollars a cupcake??

      Jesus Christ, do people really have that kind of disposable cash laying around these days? They'd better be some life-altering cupcakes for that price.

    3. Re:expensive cupcakes by Anonymous Coward · · Score: 3, Informative

      That's a normal price anywhere for high-end premium cupcakes. These aren't the dry little half-frosted cupcakes you remember from elementary school, these are basically scaled-down high-end wedding cakes that sell for $3-6 each individually, with a small volume discount. It's a trend that started with the Magnolia Bakery in New York City and went nationwide when the characters on HBO's "Sex in The City" raved about Magnolia. Every decent-size city in America has several cupcake shops these days, it's hard to throw a rock without hitting one. I can't believe you haven't seen them.

    4. Re:expensive cupcakes by X0563511 · · Score: 4, Funny

      Yea, I was thinking the same thing.

      Oh look, Italy is out of money! (continues eating $5 cupcakes)

      --
      For large sets, this will be our guide even unto death, for the LORD will work for each type of data it is applied to...
    5. Re:expensive cupcakes by rjstanford · · Score: 3, Informative

      As a general real-world rule of thumb, a convenience item that would cost you $10 in a large US city will cost you £10 in a British one. Its about buying power, not nominal currency exchange rates.

      --
      You're special forces then? That's great! I just love your olympics!
    6. Re:expensive cupcakes by Grizzley9 · · Score: 4, Insightful

      Yea, I was thinking the same thing.

      Oh look, Italy is out of money! (continues eating $5 cupcakes)

      Correction: Italy's government is out of money. Spending your cash in the market place actually helps the economy no matter the ridiculous price of the cupcake.

    7. Re:expensive cupcakes by jank1887 · · Score: 5, Insightful

      you say that, yet we had people decide over the course of a couple years that a $0.50 cup of coffee was now worth $3.95. Of course they'll pay $5 for a cupcake.

    8. Re:expensive cupcakes by sourcerror · · Score: 4, Informative

      I can buy pretty fine cake for $1, but I live in Eastern Europe.

    9. Re:expensive cupcakes by Anonymous Coward · · Score: 5, Interesting

      Yeah, they have one in Gainesville, FL. It has a Sanskrit name, Sarkara, to make you feel more educated and karmic as you spend three dollars and something for a dry cupcake that ought to cost cents. It's *exactly* the same story as with coffee a few years ago: a cup of joe that used to cost cents at a diner or lunch counter in the 80's or before now costs dollars at Starbucks or Your Favorite Local Coffee Store (if you believe that purchasing a parity product at obscenely inflated prices from a "local" merchant as opposed to a chain is somehow morally superior: enjoy handing your money over for frivolities at an accelerated rate regardless). Interestingly, a coffee at the local coffee shop (Volta) around the corner from Sarkara cupcakes cost, to the penny, exactly the same: it's almost as if you're actually purchasing a token foodstuff of purely symbolic value to justify spending time in a place Other Than Home with wifi access, and the merchants are in pricing competition over that time, not over the token food item.

    10. Re:expensive cupcakes by DigitalGoetz · · Score: 2

      To be fair, the 99% over this last decade spent a lot of their money getting these overpriced snacks/drinks while filling the coffers of the 1%.

    11. Re:expensive cupcakes by jimicus · · Score: 4, Informative

      Depends on the cupcake.

      If you're buying a basic, churned-out-by-the-thousand cupcake from a cheap high-street bakery like Greggs (or for that matter from the supermarket) you will pay 50p-£1.

      But there is also a market for a much fancier cake. Where it's made with butter rather than cheap cooking fat, where the chocolate is real, high-quality chocolate rather than cheap cooking stuff, where the flavouring is essence rather than artificial flavouring, where the decorating is done by hand and includes fancy shapes made out of florist paste as well as a generous topping of buttercream.

      We're talking the sort of thing you could happily serve to guests at your wedding. The sort of thing that celebrities you see in glossy magazines (but would rather see on milk cartons, if you're in the US) buy. Not the sort of thing you pick up for a cheap sugar rush. These will sell for about £2-3 each.

    12. Re:expensive cupcakes by D'Sphitz · · Score: 3, Funny

      Two pounds a piece? Four dollars a cupcake??

      Jesus Christ, do people really have that kind of disposable cash laying around these days?

      Ask Starbucks et al and their $4+ coffee

    13. Re:expensive cupcakes by ph0rk · · Score: 2

      If by $3.95 you mean $1.50 then perhaps. $2 on the outside, and that's overpriced.

      The $3+ drinks are usually made with milk and/or flavor and espresso. Drip coffee is still cheap. Yes, even at big chain coffee shops. If you don't want to pay that much, don't buy expensive fancy drinks.

      If I could still find $.50 drip coffee, I imagine it would taste like crap.

      (Unless, of course, you live in a large metro where prices are higher, but that's all your fault).

      --
      semantics are everything!
    14. Re:expensive cupcakes by Anonymous Coward · · Score: 5, Informative

      You really have no idea what running a business entails do you. The INGREDIENTS for a cupcake would cost cents, then add the labor, then add the rent, add the cost of the nice environment tables chairs whatnot, add the labor involved in managing both the bakery personnel and the service/sales staff as well as their benefits and insurance, and while I've mentioned it, insurance against idiots slipping and falling on a cupcake they dropped and suing, don't forget all of the overhead involved in running an office and paying for all those pennies worth of raw materials, balancing the books, advertising, There are many more costs that I haven't listed but I think you might be getting the point.

      Just because you can make a cupcake for "cents" at home on your time with your equipment, by paying nothing for anything but ingredients DOSEN'T mean that you could do that as a business and stay in business and employ people.

    15. Re:expensive cupcakes by Tharsman · · Score: 3, Insightful

      In these case they do. These are baked same day, thats part of the "gourmet" deal. The specfic article seems to list the woman managing the store as the owner too, so yea it seems to be entirely local.

      With the business being local, it means all the luxuries that business owner endulges in, will spread money (building new home? gardner? restaurants? buying a car? etc.)

    16. Re:expensive cupcakes by eepok · · Score: 4, Insightful

      Are you talking about "Sprinkles"? There's one in Newport Beach and my partner and I went there, knowing we'd be wasting our money, to buy their cupcakes and make up our minds on the value of their boutique pastries. We spent $39 on a dozen assorted.

      Our conclusions? The cake is no better than a correctly prepared Betty Crocker mix and the icing, while pretty, comes way too thick and very simple in flavor.

      Don't get me wrong. I'm not a "gourmet" hunter who thinks he can tell a $50 bottle of wine from a bottle of two-buck-Chuck. In fact, I will admit bias against these boutique places that give MASSIVE price mark-ups to otherwise cheap food under the banner of "gourmet" or "artisinal" (don't get me started on the "gourmet tamales" they sell at my local farmer's market...). So when I say a flavor is "simple", I'm saying it's nothing special that would justify such a massive cost increase.

      Summary: Spending $39 on a dozen cupcakes was a waste of money. People who pay so much for a simple pastry are stupid (self included) and those who think they're eating something with amazing flavor and tastably high quality have been fooled.

    17. Re:expensive cupcakes by cygnwolf · · Score: 4, Insightful

      No, but it does mean that I'm not going to pay $4 for the name brand on a cupcake when I could get the same cupcake for $0.89 at the no frills mom and pop bakery around the corner from my house except that it came in a plain paper cup.

      --
      Free Pie! The Pie is Also Evil!
    18. Re:expensive cupcakes by nedlohs · · Score: 4, Interesting

      If you are paying such prices for the shitty brewed coffee you were getting at a lunch counter, then yes you are being an idiot and getting ripped off.

      But an esspresso machine costs significantly more both in initial cost and in maintenance costs than a brewing machine. It also requires more training to use (though Starbucks seems to skip that bit). It's also significantly slower (so you need more staff hours to make the same amount of coffee).

      Of course Starbucks coffee is crap, though orders of magnitude better than the swill that passes for brewed coffee (and of course Starbucks does brewed coffee too - but why would you go there for that???)

      And cupcakes have none of that. A "gourmet" cupcake is made in exactly the same oven with exactly the same ingredients as a regular cupcake...

    19. Re:expensive cupcakes by eepok · · Score: 2

      continued...

      Of course, the "regular coffee" from these chain barrista places typically taste like cigarette ashes because they keep the same pot on high heat for 5 hours out of the day.

    20. Re:expensive cupcakes by scottbomb · · Score: 4, Funny

      You should see what they pay for gasoline.

    21. Re:expensive cupcakes by dondelelcaro · · Score: 5, Insightful

      A "gourmet" cupcake is made in exactly the same oven with exactly the same ingredients as a regular cupcake...

      Just like a computer contains the same silicon and rare elements as any other computer, the devil is in how they're assembled and put together, and the skill with which someone makes them. A "working" program is made in exactly the same compiler with exactly the same syntactical constraints as a segfaulting program

      --
      http://www.donarmstrong.com
    22. Re:expensive cupcakes by cayenne8 · · Score: 2, Informative

      Where do you people live that you are not seeing the cupcake craze and the $3-$4 price tag.

      New Orleans.

      I'd not heard of this at all, till this thread...

      Then again, who needs cupcakes, when you can run out here and get a plate of freshly made beignets, and cafe au lait....for a few dollars?

      :)

      --
      Light travels faster than sound. This is why some people appear bright until you hear them speak.........
    23. Re:expensive cupcakes by eedwardsjr · · Score: 2

      I will sell you a gourmet "." to put between Beach and Are.

    24. Re:expensive cupcakes by MobileTatsu-NJG · · Score: 2

      ...do people really have that kind of disposable cash laying around these days?

      How much did you spend on your video card?

      --

      "I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)

    25. Re:expensive cupcakes by petermgreen · · Score: 3, Informative

      Does that actually exist?!

      yes. £1.09 each

      http://www.waitrose.com/shop/ProductView-10317-10001-110438-Cherry+%26+geranium+cupcake

      --
      note: i'm known as plugwash most places but i screwd up registering that here somehow in the past and now can't register
    26. Re:expensive cupcakes by Grishnakh · · Score: 2

      Of course Starbucks coffee is crap, though orders of magnitude better than the swill that passes for brewed coffee (and of course Starbucks does brewed coffee too - but why would you go there for that???)

      Apparently a lot of people like paying a lot of money for burnt coffee.

    27. Re:expensive cupcakes by RajivSLK · · Score: 5, Insightful

      Exactly this. Except the $0.89 cup cake at my local grocer is made with mostly lard and sugar with waxy poor quality chocolate and lard icing and comes in maybe 3 different flavours and is sold in very high volumes at a low price.

      Whereas the specialty cup cake is made with real butter high quality chocolate and other ingredients and is available in 20 different flavours and is sold in low volumes at a high price.

      Basically think of Neapolitan ice cream from some big manufacturer vs Baskin Robins or some such. You can argue that they are overpriced for what they are but you can't say that the products are exactly the same.

      One last point I'd like to make is that in some other countries in world, like France for example, specialty bakeries making high end pastries and cakes are the *only* types of bakeries. People are so willing to pay for higher quality food that there are no cheap grocery store alternatives. So maybe it's not a fad.

    28. Re:expensive cupcakes by BitZtream · · Score: 2, Interesting

      Exactly this. Except the $0.89 cup cake at my local grocer is made with mostly lard and sugar with waxy poor quality chocolate and lard icing and comes in maybe 3 different flavours and is sold in very high volumes at a low price.

      Whereas the specialty cup cake is made with real butter high quality chocolate and other ingredients and is available in 20 different flavours and is sold in low volumes at a high price.

      You're an idiot.

      That high volume cup cake with 'low quality' ingredients probably actually has far higher ingredients.

      Anyone who actually works in the industry is fully aware that a factory sized bakery is FAR more stringently controlled than moms corner cupcake shop, where they buy 'organic' ingredients, that are filled with all sorts of evil chemicals because while they were being brilliant about not using pesticides instead they used 'organic fertilized' treated with all sorts of other chemicals which should never be put on food products.

      They are ALL lard and sugar, you just want to pretend what you're paying $4 is different. Having worked in public health, I know far to well that you're ideas about how the little guy is 'better' or than the big guy could not be more wrong, almost 100% universally. The little guy gets by with FAR more than the big guy, which has thousands of vultures sitting around waiting to sue the ever living piss out of him.

      --
      Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
    29. Re:expensive cupcakes by mwvdlee · · Score: 2

      So it's basically french toast?

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    30. Re:expensive cupcakes by RajivSLK · · Score: 3, Insightful

      I'm an Idiot? Really, that's how you start your argument... wow. I don't even know why I bothered reading the reset of your comment. When you start a response with "You're an Idiot" it just makes you sound stupid.

      Firstly, I don't really care how "controlled" a factory is. I didn't say that the factories used inedible or poisonous ingredients. I'm sure everything they use is approved and won't make you sick. Just like Neapolitan ice cream from the grocery store is perfectly fine to eat.

      Secondly, I don't care what you think "everybody in the industry" knows. Appeal to authority doesn't help your argument.

      Thirdly, I never said anything about organic ingredients so I'm not sure why you brought it up. When I said high quality ingredients I meant things like real vanilla bean in a vanilla cup cake instead of "artificial vanilla flavour" or saffron in a saffron cup cake. Or orange zest in a orange cupcake instead of "artificial flavours and colours". I suspect you would know this if you ever left your mom's basement.

      Fourthly, they are not ALL lard. Almost all specialty shops use real butter. Just Google "specialty cupcake ingredients". It's not that hard. You live in a really vacuous world if you think you can't get a real butter cupcake.

      I am guessing that you don't travel much and haven't experience things and people out of your comfort zone. You probably don't feel welcome in new environments and around new people. Probably because you flippantly call people "idiots" and then go on to say the stupidest things. I suggest you try being a bit more buttery to people perhaps little sweeter and more sugary and then, perhaps, you will make something called a "friend" or even multiple "friends". And maybe, just maybe, one of these "friends" might even buy you a cupcake, with real butter.

    31. Re:expensive cupcakes by z0idberg · · Score: 3, Funny

      It takes a lot longer to type out "Unsanctioned and illegal invasion toast". So its shortened to "Freedom toast".

  16. Only The Latest GroupOn Horror Story by Nom+du+Keyboard · · Score: 4, Insightful

    This is only the latest GroupOn horror story, and many of them probably don't make the press. Personally I won't even use GroupOn because I feel so sorry for the retailers involved. It's a personal decision.

    The next horror story will be from the people scammed by the IPO who thought that they were buying into a company that actually created something of value. Hard to believe that Google once offered billions ($5.75 billion, I believe) for this vaporware company -- and GroupOn actually turned them down. That was the luckiest turndown since Yahoo! refused Microsoft's (by today's standards) insanely generous offer.

    --
    "It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
  17. Groupon needs a staggered approach by Maximum+Prophet · · Score: 4, Interesting

    Groupon should offer a staggered approach. First 100 customers get offered 75% off. Next 100 get offered 50%, then 25%. After a time, the system could float to the discount that was optimal, with some total per day limit.

    --
    All ideas^H^H^H^H^Hprocesses in this post are Patent Pending. (as well as the process of patenting all postings)
  18. Don't sell at a loss by Pitr · · Score: 2

    Anyone who offers a sale below the cost of manufacture is seriously lacking in business sense. At worst this should only have netted zero. Any model where "the more you sell, the more you lose" is just stupid. That, and if you can't make a dozen cupcakes for £6.50 (~$13!) after cost, you should really give up baking.

    --

    --Not to be worried, Pitr fix.
    1. Re:Don't sell at a loss by Burning1 · · Score: 3, Insightful

      Never ever heard the term "loss leader" have we? Frys makes a lot of money selling $100 cables to the guys who buy $500 TVs.

  19. Do the math by Temujin_12 · · Score: 4, Insightful

    My wife owns her own photography business (just her and an employee) and she had been toying around with the idea of using Groupon and LivingSocial. As much as she hates spreadsheets, I made here sit down and model what the deal looked like and what her break-even points were. Talk to your Groupon/LivingSocial rep. to get stats about similar deals (as much as they can give you)--quantity, conversion rate, customer conversion, etc and be conservative since the rep will definitely paint a rosy picture. After doing that, she made some very important changes to the structure of the deal she made with LivingSocial that protected her against some run-away scenarios that would have cost her money like this person ran into and the LivingSocial deal has been a great success.

    The other thing, hinted at by the owner of the bakery is your brand. If all you're concerned about is pushing product and volume, then a low-end price for the Groupon/LivingSocial deal is the way to go. But be aware that the lower the barrier to entry the less the customer values you or your services. For service-based businesses (like my wife's photography company), a higher price for the deal is more likely to bring customers who value service and quality. You can still offer good discounts while having a higher price point by carefully choosing what you discount and what they are purchasing up front.

    Bottom line: know who your optimal customer is and do the math or you're likely to get burned.

    --
    Faith is a willingness to accept something w/o complete proof and to act on it. Reason allows you to correct that faith.
  20. At least she honored them by Skraut · · Score: 4, Insightful

    A few months ago a local restaurant had a Groupon which my wife purchased. It was a 5 course dinner for 2 for $20 on weeknights, or $30 for Thursday - Sunday. Within 2 days she received an email from Groupon stating that the restaurant was no longer honoring the deal. Groupon gave us a full credit (not refund, just money we could use towards another deal) Ever since this, my wife has not wanted to go back there.

    The irony of this was that we discovered this restaurant through a different deal website, and it quickly became somewhat of a regular for us. Honoring a previous deal made us customers, not honoring a subsequent deal made us no longer customers.

    --
    Introducing Microsoft Vacuum 1.0 The first Microsoft product that doesn't suck.
  21. When Groupon actually works.... by awjr · · Score: 4, Informative

    I've known a number of businesses that got burnt by Groupon. One of the pubs we used regularly did a groupon deal and we went in and bought a lot of drinks with the meal. Most other people just asked for a glass of water and never came back.

    There are two situations where Groupon works:
    1) There is no cost to you (Gym membership) and there is a chance to up sell.
    2) You have sourced an item at a ridiculously cheap price and even with Groupon taking 50% you are going to make a profit.

    On (2), I knew somebody who sourced suits for $30, created a web site for the sales ploy, sold a 1000 units through Groupon at $250 and made a fortune.

    Groupon can be extremely destructive to your business.

  22. cut off? Re:And the moral of today's story is... by Fubari · · Score: 2
    From TFA:

    Mrs Brown said: "We had thousands and thousands [of orders] pouring in. We had to cut it off at 8,500 orders. As soon as we were making, packaging and sending the cakes out we were on to the next order. It was non-stop.

    (emphasis added) Near the end of TFA:

    Heather Dickinson, a Groupon spokeswoman, said there was no limit to the number of vouchers that could be sold. She said: “We approach each business with a tailored, individual approach based on the prior history of similar deals.”

  23. Advertising is not free by sunking2 · · Score: 2

    This is a bit like buying a TV ad and complaining that it is costing you money for the airtime. The idea behind groupon is that you attract new customers with crazy low one time prices. Of course it may cost money. Advertising always does. In the end all she should care about is whether or not she adds enough extra customers to purchase more than $20k, or whatever her costs were do to this promotion, later on down the road.

  24. Re:There is no "inability" by vux984 · · Score: 5, Insightful

    Merchants simply fail to actually do so.

    Not quite. The merchants that elect to set reasonable caps don't get their promo run. So you don't see them.

    Groupon runs the deals that make them the most money.

    If a cupcake business wants to run 200 coupons @ 75% off for $7where groupon takes half ($4.50) that's only $900 for groupon.

    Groupon simply won't run that deal.

    Groupon pushes hard for deals they damn well know don't make an ounce of sense for the business.

    When I hire a contractor, or a consultant, or an ad agency... their job is fundamentally to come up with a good solution for the the business.

    If a particular contractor consistently advises, even pushes businesses hard to make catastrophic decisions then they deserve some of the credit for those catastrophic decisions.

  25. Classic Newbie Mistake by JSBiff · · Score: 2

    When you run the 75% off sale, you are supposed to first mark the price up by 150-200%. Nub got pwned.

  26. There's a reason you spend $39 on a dozen cupcakes by raehl · · Score: 5, Insightful

    Because you're buying them for an "occasion".

    If you are tasked with providing dessert, stopping at wal-mart on the way to whatever occasion it is to pick up a dozen cupcakes for under $10 is tacky.

    But if you stop at the "gourmet" Cupcake place and spend $40 on "special" cupcakes, that's OK.

    You're really paying for the ability to buy your way out of having to actually bake without the social stigma of being too cheap/lazy.

    --
    paintball
  27. Note: by raehl · · Score: 2, Interesting

    Not that I would ever do such a thing. I tend to avoid hanging out with people who would assign social consequence to buying the Wal-Mart cupcakes. But lots of people who don't operate that way.

    --
    paintball
  28. Analysis not complete... by raehl · · Score: 4, Insightful

    ...What's the price of advertising in all the newspapers etc that are covering this story?

    --
    paintball
  29. Re:Groupon is for Marketing by afabbro · · Score: 2

    I just don't understand why Groupon doesn't set expectations properly with their merchants. When these bad things happen, all 3 (Groupon, Merchant, Customers) lose. Groupon loses follow-on business from the Merchant.

    ...and I think that's the disconnect. I don't think Groupon is a "built to last" kind of company. They are a "built to IPO" kind of company. Eventually they will run out of merchants who'll try their service, but by then Groupon will long since be out of business.

    --
    Advice: on VPS providers
  30. Groupon is a simple scam by SmallFurryCreature · · Score: 3, Interesting

    The obviousness of Groupons scam is obvious enough to most but the more subtle one is the lie of advertising. Advertising does NOT work as advertised. That is something to remember, advertising is a product SOLD by advertising agencies. So the companies telling you advertising works because they studied it are advertising companies... conflict of interests?

    You have two basics forms of advertising. The first people barely think about but is putting your products and your shop on display. It is not just the sign above your door but prices on your products. Think about this simple thing, did you EVER walk out of store because you couldn't find the price so thought "fuck this". BAD advertising. A lot about this basic advertising is convincing people to enter your shop because they think that what they want can be got at an acceptable price. For stores like bakeries this means charging the right amount for the right amount of convenience and quality. People complain about Starbucks being to expensive but they got fast steady quality service (compared to all the other alternatives at premium locations. I can get a cup at a burger chain for less next door at say Utrecht Central station in Holland but GOD the burger joints service is piss poor).

    But if you want MORE customers then pass by traffic. What do you do... advertise? Do you READ advertisements? No? To busy. Exactly. Anyone that can afford a 5 dollar cup cake is far to busy to read the local newspaper. Same with banner ads. Who here sees banner ads? If you see banner ads, you are in a lower class. Elitist? Damn right.

    Research has shown the Groupon's claims on age and income of their users are over-estimated. They are an older demographic and a poorer demographic. This is a group who hunts coupon's. They use a coupon and then don't come back unless they get another coupon. They are deal hunters.

    If you got something to dump, then deal hunters might be worth going after but if you got a premium product that doesn't get 75% cheaper in total costs with bulk, then Groupon makes no sense.

    Groupon works for HP Printers because HP makes its money on ink. It makes sense for products you need to shift now and you got to much off or make a very high margin on but otherwise, it NEVER makes sense.

    Food products and services do not work with massive discounts aimed at bargain hunters.

    It would be like selling Rolls Royce at 75% discount hoping for repeat business.

    Not only do people not NEED two of them but those who buy it at the discount can't afford the regular price AND at the same time you are diluting the price of your product for your regular customers.

    Or how would you feel if the person in front of you paid 1/4th of the price charged to you? If I was in that store behind a groupon customer and they tried to charge me full price they would be picking cupcakes out of their ears.

    A european chain stunts with taxless days, basically a 20% cut that amounts to the regular sales tax. So... I never buy from them unless they run one of these events because I can wait for them or another chain to run one when buying a TV or such. Turn your customers into bargain hunters and bargains they will hunt.

    Stay away from advertising unless you truly and fully understand what it is going to cost and what it is going to deliver you. It is like gambling. Or lawsuits. Casino's, lawyers and advertisers ALWAYS win.

    --

    MMO Quests are like orgasms:

    You may solo them, I prefer them in a group.

  31. Good On Her by DiabolicallyRandom · · Score: 2

    I think the neat thing here being glossed over is that she actually followed through on this, even going above and beyond to hire extra staff to meet demand. She could have easily played the "while supplies last" card, or done any number of other "shady" things to try and avoid fulfilling all of the requests. I know for a fact if this had happened somewhere around where I live, the proprietor would have fed a line of bullshit and invalidated the coupons or some crap.

  32. Re:There is no "inability" by vux984 · · Score: 2

    Most businesses around here *make* money on groupon deals.

    There are -some- business models where groupon makes money. There are several more where it makes sense to run a groupon for advertising at certain pricepoints / limits.

    But to claim "most businesses around here make money on groupon deals" is a flat out lie, and is precisely the sort of CRAP groupon tells businesses while inducing them to make catastrophic decisions.

  33. Regarding just the cooking side... by pkinetics · · Score: 2

    I'm mostly curious to what people's experience is

    How many people bake? I mean real pastry baking, not the prepackaged mix.

    How many people have been to a cupcake shop? I have a couple in my area, but they also make cakes.

    I love to cook, in almost all forms: Cooking, grilling, frying, roasting, and baking.

    I now some people are excellent at baking, and horrible at the rest, or horrible at baking but exceptional at the rest.

    Baking is a more precise science. Everything has to be properly measured. Simple variations in ingredients or processing can have profound results.

    There is a huge difference between All Purpose Flour versus Cake Flour; Instant Yeast versus Cake Yeast. And then there is the knowledge of how it all goes together.

    Throw in frosting, and piping on whatever little decorations go onto the cake.

    Now take the cupcake. It is smaller, has more surface area, and requires more manual labor (frosting is a pain unless you are really good at it).

    Cupcakes are the least forgiving. It is a cake, that is not a cake. It dries out significantly faster than a regular cake due to its increased surface area. Even if the cupcake is perfect coming out of the oven, it probably will not be after several hours in a display case. And its not like a cake store wants to sell day old cupcakes. The frosting picks up aromas and what nots just sitting around. They are either given away or thrown out.

    In other words... cupcakes are a royal pain in the arse...

  34. Re:There's a reason you spend $39 on a dozen cupca by BitZtream · · Score: 3, Informative

    Actually, if you knew anything about walmart you'd know that it most likely came from the same town, certainly within 100 miles of the store. Even with American's requiring overpay to do menial jobs, its still cheaper to bake locally than ship across an ocean. We have automation for the bakery and can the truck still has to drive them in from somewhere so we don't buy food from overseas.

    On the other hand, guess where most American beef ends up? Not in the US!

    P.S. Before you bitch about walmart, get a clue about whats really going on, bitch about the things they do wrong, not the the things you're too ignorant to realize they do right.

    --
    Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
  35. Re:You'll pay £3 at a supermarket by arkane1234 · · Score: 2

    No, the supermarket sells a cupcake for $4 for 4. (/sarcasm)

    How many supermarkets are there, and how could they all be the same?

    --
    -- This space for lease, low setup fee, inquire within!