Why I Said No To Groupon

March 19, 2012 at 3:26 pm (Announcements, Projects) (, , , , , , )

ImageA few weeks ago, a representative from Groupon called me about offering a coupon through their site for Angel Cakes.

We talked for a while and she explained it all to me. I recognize that she is essentially a salesperson and her job is to make it sound like a good deal. She succeeded. You can read all about it on Groupon’s site for selling their service to businesses, Groupon Works.

Despite the sales pitch, I was skeptical. I started talking to a bunch of people about their experiences and thoughts about it and eventually decided not to do it.

Why I said No

Let me be a bit conceptual here for a moment.

Like most small business owners, I consider what I do a craft. Each cupcake order I make is custom made in a small batch, usually by me with the occasional help of an assistant. What I charge for my work is that (sometime elusive) sweet spot between what it actually costs me to produce the order and what people think it’s OK to pay for cupcakes (aka “what the market will bear”). There’s not really a lot of wiggle room there.

Capitalism is really good at instilling in us the desire to pay as little for things as possible, despite what the things cost to produce. This doesn’t make sense. When we look at the “slow food” and artisan food movements, where things like organic vegetables and fancy cheese and nice bread cost a lot, the producers say it’s because that’s what it actually costs to make the food. While I’m sure we can all think of fancy food and artisan things that are over-priced, for the most part, while we live in a system where we pay for food (which is kind of absurd, but that’s another story), I think that charging what it actually costs to make something is right.

Offering a coupon (Groupon says it needs to be at least 50% off) encourages that kind of behavior – of thinking not of what something is worth, but a more self-focused “what kind of deal can I get this for” attitude that I don’t want to encourage. At all. It’s not the way to value things that are produced ethically, by people who care about what they are making and their customers.

Not offering a coupon feels like I’m saying “this is what my product is worth.” Good. Let’s go with that.

Isn’t it worth it for the marketing / getting my name out there?

As someone who works on publicity and marketing, I think about how to get the word out about projects all the time. Unlike other people, I think spending money on marketing and promo efforts is important and can be effective when done right.

When people say “I lost a lot of money using Groupon,” Part of me thinks of that dollar figure not as lost money but as the cost of a marketing effort. Then the discussion is, is that dollar amount something I am willing to pay as an investment in marketing? and did I gain customers as a result? For most people, the answer is no.

For example, when I look at my Groupon/coupon buying behavior and that of my friends, which I can guess is not that different from most of the Groupon-buying public, I pretty much only buy coupons for places I already go or have no intention of going to again after I’ve spent the coupon.

Most people who buy online coupons are coupon shoppers. If they want more cupcakes, they’re not going to buy from me, they’re going to wait for the coupon for the next cupcake place (because we all know that cupcake places are everywhere right now).

Now that I’ve had the opportunity to think about this in an in-depth way, I’m not doing that any more. It basically financially penalizes the small businesses and restaurants that I am patronizing and want to support. They’re not gaining me as a customer since I already go there (or don’t intend to go again), they’re just losing money on the transaction. If I don’t want people to do that to me, why am I going to do that to others?

One of the caveats I can imagine is that if I were offering, say, a yoga class where my costs stayed the same even if the number of participants increased, then it might make sense. But, obviously, cupcakes are different than yoga. And if I offered a class, I would probably just offer an introductory package (like half off your first month or something), bypass Groupon, and spend my time and money on social media.

Some of the things I read from other small business owners

There are a ton of posts out there about Groupon. Here are some of the ones I read that impacted me:

  • Why Groupon is Bad for Small Business by Jeff Korhan. Jeff asserts that using a Groupon sends the wrong message, attracts the wrong customers, and creates new expectations. A lot of what he says is echoed above.
  • Why Groupon is Bad for Business.. And Consumers by Maria Langer. I love this one. Maria really goes to town not only on the financial details, but on why we need to remember that Groupon is in this to make a profit – at our expense.
  • Groupon in Retrospect by Jessie. The owner of a cafe details their experience with Groupon, and calls it “the single worst decision I have ever made as a business owner.”

* * *

Notes.

I recognize that it may appear contradictory that I claim to be an anarchist and anticapitalist while at the same time being a small business owner and entrepreneur.

Never fear, I have planned a discussion of why this is not contradictory at all, to happen some time soon. The short answer is that a system where basic necessities are only available to those who can afford them is unconscionable. And though everyone would be better without capitalism, that is what we have right now and there need to be ways to exist within it that are better, while we work toward making something else a reality.

Like I said, more on that later. I’m talking with a bunch of my friends and comrades who are in the same position and am hoping to write up something in the next few weeks based on those conversations.

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13 Comments

  1. Maria said,

    Thanks for the link love. I’m glad you didn’t get sucked into Groupon.

    And now I feel like having a cupcake.

  2. Jen Angel said,

    Thanks Maria – I loved your post!

  3. Daniel Solnit said,

    Dear Jen, anarchist entrepreneur –
    Thank you for finding a way to pay your landlord and grocer that does not directly exploit others, and minimizes your participation in the indirect exploitation of others (esp global south). Thank you for producing a more-or-less sustainable product or service of genuine value to others, and only seeking a living wage rather than excessive profits. Thank you for running your business as ethically as possible, given the current economic system. If any self-proclaimed anarchists give you a hard time about this, tell them I said to fuck off. – Daniel

  4. giarc said,

    True, a lot of anarchists are anti-capitalist, but I don’t think that anarchism equals non-capitalist. The extent of state control and the method of economic organisation are orthogonal. We have to decide how we want to do both of them. Moreover, we all have to operate in the world as it exists today, even if we want to change it.

    So in short: Bravo to you for making an informed decision! I think that Groupon’s business is mostly a transfer of money from small business to themselves, and they’re less than honest about that.

  5. Interesting Links, March 19, 2012 | An Eclectic Mind said,

    […] Why I Said No To Groupon – Another smart cookie doesn't sell out to Groupon. Bravo! This entry was posted in This just in… and tagged Groupon, links by Maria Langer. Bookmark the permalink. […]

  6. Jen Angel said,

    Hey Giarc – I don’t think I know any anarchists who are pro-capitalism. But, I suppose it could happen.

  7. giarc said,

    I became acquainted with the idea of capitalist anarchism from one of my college professors, who wrote a book on the subject. I don’t think it’s in print, but you can read an excerpt of his writing here:

    http://people.rit.edu/jtsgsh/PAPERS/stateless.pdf

  8. dingdingwikki said,

    I think this post is better marketing than a Groupon coupon.

    I don’t have any kind of large event coming up any time in the future that I can think of (and for a small event I’d probably just bake my own cupcakes), but I’ll be sure to recommend you if I know of anyone for whom it might be the case. Maybe I can even persuade my employer — we’ve done cupcakes before.

  9. Justme said,

    so you think that $30 per dozen of cupcakes is a “smidgen” over what it costs to make ? I beg to disagree.

  10. Jen Angel said,

    Would love to hear more of your thoughts on this, Justme.

  11. Anonymous said,

    “I recognize that it may appear contradictory that I claim to be an anarchist and anticapitalist while at the same time being a small business owner and entrepreneur.

    “Never fear, I have planned a discussion of why this is not contradictory at all, to happen some time soon.”

    I fear for your answer. I think it should be clear to any anarchist that these two things are without a doubt contradictory. I’m not saying that to tell you that you should quit what you’re doing, I’m just saying that pretty much any anarchist living under capitalism has to do things that contradict their principles in order to survive, and that dealing with that contradiction is a fundamental part of being an anarchist in this world. You seem to enjoy making a living through cupcakes, and I do not begrudge you a livelihood, especially one that you do not experience as soul-crushing. We all have to survive somehow.

    But I dread the lines of thought that you are following. I fear for what your apology for small business and entrepreneurship will be: both of those things are anathema to anarchy, and to make a supposedly anarchist apology for them would be to make an anarchism which is consistent with the reproduction and praise of bourgeois society. If you make some sort of argument that anarchism is consistent with entrepreneurship (and thus, middle-class capitalist values), you are creating an anarchism which has been de-fanged and de-clawed, and is basically a dressed-up version of the left progressive politics of the middle class. To be an anarchist in a capitalist world is to live with contradiction, hypocrisy, and discomfort, while fighting for a different world. (And when I say fighting, I mean with physical and material confrontation, not some kind of battle of words and mind-power abstracted from the material realities of power and violence)

    Any anarchism that cozies up to small-business entrepreneurship as a natural bedfellow has lost track of what anarchy actually means, and I would argue it does not deserve the name at all. (Though of course, there are tons of people with this kind of “progressive anarchism” all over the place, especially in the Bay.)

  12. Anonymous said,

    “Dear Jen, anarchist entrepreneur –
    Thank you for finding a way to pay your landlord and grocer that does not directly exploit others, and minimizes your participation in the indirect exploitation of others (esp global south). Thank you for producing a more-or-less sustainable product or service of genuine value to others, and only seeking a living wage rather than excessive profits. Thank you for running your business as ethically as possible, given the current economic system. If any self-proclaimed anarchists give you a hard time about this, tell them I said to fuck off. – Daniel”

    Daniel: Sure, and that’s also not enough. I don’t mean to say anything against Jen; I, for one, love cupcakes and I know that I would be delighted to eat one of Jen’s. I mean that in truth. At the same time, I can’t let that comment slide without critiquing the unspoken implication underlying your statement. Individual choices made within the functioning of the capitalist system are nice, and they help us feel better about ourselves, and they maybe help some other people not get fucked over quite as much, but they aren’t going to change what needs to be changed. No matter how ethical anyone tries to make their business, that business is still operating by definition in capitalism, and will by definition be unethical and predicated on slavery and exploitation and ecological devastation, somewhere. Sugar-coating that fundamental reality does a disservice to anyone who cares about ending the slavery and exploitation and ecological devastation indispensable to all capitalism, no matter its form or its local manifestation. Sugar-coating that fundamental reality lulls people into forgetting, which lulls them into more and more active collusion with white supremacy, colonization, and heteropatriarchy. It strengthens the power that domination has in the world.

    It’s easy to feel miserable while reckoning with an understanding of the world which refuses to sugar-coat the exploitation we are complicit in, and which rejects feel-good politics like the ones you seem to embrace. Feeling miserable a lot of the time is part of what being an anarchist in this world generally requires.

  13. Cam said,

    Hey Jen, have you followed up with a post about how to be an anarchist in a capitalist society, like you mentioned at the end of this post? If so, where can I read it? Very interested and loved your post!

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