The Disadvantages of using Online Group Buying

There is always a good side and a bad side of a products or services. Online Group Buying like Groupon, WeBuy or even Everyday are good but there have their disadvantages for the company who are using it.

a)It attract low-end bargain seekers:

This is because their customers mainly comes from bargain shoppers so there are low rates of spending and low rates of return.

b)It don't generate repeat customers: 

For online group buying, you will hardly get repeat customers keep buying the deal again. They may never buy from you again without a coupon on hand. So it is mostly varies by product categories.

c)The deals are not profitable:

Normally these company will keep 50% of the revenues from each coupon deal. However for those normal company are keeping 75% of the revenues, so whenever the customer buy the deal, the company gonna loose money.

d)Deals hurts the brand:

For this, it is not building up the brand loyalty and brand awareness for all the brands because the obsession with price. Besides that, it makes customer price sensitive because they tend to pay low prices for certain products or services and become inclined to pay full price for the same item again.