Living Social = Living Nightmare

[ShineTimeDetail]

I have never been a fan of these sites (Living Social, Groupon etc). First of all you have to discount your service, usually by at least 40-50%, so right off the bat your $100 service is only selling for $50. then on top of that the site takes a percentage (40-50%) so in reality you are doing the job for 1/4 of the price. I'm sorry, but for a service job that doesn't make much sense to me at all. People will talk about upsells and so on, but you can't count on them, and thinking you MIGHT get upsells doesn't pay the bills last time I checked. Here is some quick math:

Let’s say you are selling a $100 wash and wax for $50, so you are actually getting $25 after all the fees. You are going to make a total of $15000.00. That sounds awesome at first, however.... If you work 6 days a week you can knock out 2-3 a day (you're not doing more and doing them right) you are talking about taking 200-300 days to finish, that’s almost a year, and doesn't even take into account paying for supplies, electricity, water, rent, or helpers if you have any. So in essence you are taking a year of work and only making $15000 minus expenses, which comes out to about $7.5 an hour on the high side. Doesn't make much sense to me.

On the other hand if you are a high volume shop you would make the same amount of money, but you would have to pay helpers to get them all done. It would take far less time, but you would be left with far less profit after it’s all said and done. All in all I think that those sites are great for the customer, and great for a company that sells a product, but for a service like detailing, I just don’t think it makes sense.

Now, if you scale it back a bunch to say 25-50 units, it can be a good way to get customers in the door. However, I have looked into both of the most popular sites, and in my area they would not allow me to set a deal for less than 500 units. It just isn’t worth it.

I'm sure he didn't sell full details-- 90% of the time the sell express details which are basic car washes with a spray wax- A basic wash takes about 1 hour and obviously the time goes down with more workers. So if you divide the area up and pick one area one day another area another day and so on you could knock between 5-8 cars a day out

He should have put a cap on the number sold.

[Kristopher1129]

Most likely...this was just a bad plan all the way around. He probably offered too good of a deal. If you offer something people can't resist...then they won't! Then you end up selling 600, and you're screwed.

But, honestly...selling 600 coupons gives you quite a hefty paycheck from them up front. And, gets you a TON of new customers. A lot of those customers will turn into regulars, or drum up new business if a job well done is peformed.

Time to man up. You're either serious about your business or not...

I'll tell you right now, if I sold 600...you bet your ass I'd have 600 new customers, period. I wouldn't see a problem with that. I'd simply hire some help. If you don't want to grow...then don't make an attempt to accumulate business.

[Bunky]

I have received promo's from angies list and their "retail" price is marked up so the deal is not really a deal.

[SeaJay's]

I've long considered doing a living social or groupon type thing, but I can't bring myself to take a hit like that.

Even if I sold 100 (which they typically want more than that). That's work I'm doing for a quarter of the price that I typically would. I'd much rather be making my full price and have less details than be swamped with details where I'm not making any money.

Just my 2 cents for what it's worth.

[Garry Dean]

See my thread about this here

Living Social

[jcbutta]

I've long considered doing a living social or groupon type thing, but I can't bring myself to take a hit like that.

Even if I sold 100 (which they typically want more than that). That's work I'm doing for a quarter of the price that I typically would. I'd much rather be making my full price and have less details than be swamped with details where I'm not making any money.

Just my 2 cents for what it's worth.

These sites (groupon, living socia, etc) should not be used to drum up business. They should be used to drum up "repeat business". Sure you will take an initial hit in the beginning, but if you do good work, hopefully you will have a customer for life.

[Flash Gordon]

I have received promo's from angies list and their "retail" price is marked up so the deal is not really a deal.

This is the key ^

If you would just raise your retail price to compensate for all the BS, then I think this could be successful

Another thing: Offer different monthly specials

Advertise a 21 step (exterior only) detail or something the 2nd month

[Flash Gordon]

LOL I like that math Flash!

If you only sold 30 @ $200, thats still $600,000 no matter how you slice it

[gumball]

These sites (groupon, living socia, etc) should not be used to drum up business. They should be used to drum up "repeat business". Sure you will take an initial hit in the beginning, but if you do good work, hopefully you will have a customer for life.

Why use GRoupon/LS to drum up REPEAT business?these sites give you NEW customers(at a high cost to you).If you want repeat business offer your customer a discount directly, that way your not giving a cut to LS/ groupon.

[jcbutta]

Why use GRoupon/LS to drum up REPEAT business?these sites give you NEW customers(at a high cost to you).If you want repeat business offer your customer a discount directly, that way your not giving a cut to LS/ groupon.

point taken. the only thing is, these companies give you tons more exposure than just putting an ad in the local newspaper or sending out mailers.