Groupon is a website that works with merchants all over the country to offer unheard of discounts to everyday people. The discounts that Groupon offers can be as much as 90% off the retail price and they have offers for everything from restaurants to entertainment and even plastic surgery.

While consumers love the deep discounts that Groupon can produce, many merchants are less than thrilled with the results they receive using Groupon. The question becomes is this due to Groupon being a bad place to do business or is it due to merchants simply being unprepared? If you are considering using Groupon then you should know all the pros and cons before you make the investment.

Just as with anything other type of advertising, knowing all the pros and cons in using Groupon will help you determine if you should use the website to help promote your business or seek alternative resources.

First take a look at the pros:

• Attracts Customers: You can really create a buzz and attract new customers in huge numbers using the services of Groupon. New customers get a great deal and hopefully become long term customers if they lie what your business has to offer.

• Great Advertisement: Increase the chance that you will not only get new customers, but repeat customers as well. Groupon has tons of visitors everyday and each visitor is a potential new customer for your business.

• Move Excess inventory: Groupon is perfect for unloading inventory that you have sitting stagnant. Sometimes taking a little less money is better than getting nothing at all. Plus you get the added bonus of getting your business name out there.

Of course with the good comes the bad and so, here are the cons usually associated with Groupon:

• Deals Kill Your Brand: Those who are seeking deals are not going to be those who are loyal to any brand. Instead their loyalty will be with the lowest price and if that isn't you they will likely look elsewhere.

• Deals Can Kill Profits: Groupon will get 50% of whatever your deal generates so low margin deals will kill your profits. In fact, you could end up losing a lot of money if you are not careful. This is a chief complaint with Groupon, but margins should be the first thing considered before deciding to pull the trigger.

• Deals May Not Convert: While you might think that offering deals will build a customer base, many are saying the opposite is true. According to some, the conversion of customers with Groupon is low because the types of people searching on Groupon are again only looking for deals.

All this is not to say that you should or shouldn't use Groupon for your business, but it is suggesting you do your homework. Groupon is like any other way you would promote your business. If you do so in the proper manner, you can all but guarantee a successful campaign. However, if you jump the gun and don't look at all the angles, you could end up costing yourself money and your advertising campaign will be all for not.

Read what others have to say by reading Groupon reviews.

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