What is Groupon

First up, Groupon rhymes with Coupon which gives you an indication of what it is.

Groupon provides to its subscribers a group coupon – Groupon – that is valid with participating,often local, retailers provided a minimum threshold number of subscribers have signed up for the offer.

For retailers the attraction is a sharp increase in business without the need to pay for anything up-front. This minimises the financial risks and is in sharp contrast to paying for advertising without knowing the outcome.

Groupon makes its money by charging retailers a percentage of the value of sales made from group vouchers.

Key elements of the idea behind Groupon is to make sure that those people offered Groupons are well-targeted and that the businesses being promoted are already well-established and successful in their own markets.

The growth of Groupon has been spectacular and having kicked off in 2008 it was given a market value fo $6.4 billion according to Wikipedia in December.

Internet marketers are excited by Groupon as it seems to have found a business model that lays open the hyper local advertising market place and the company is promoting itself widely in a bid to establish a dominant, first mover advantage in the local advertising market place.