Tuesday, November 29, 2011

My love hate relationship with Groupon

I am strictly speaking about Groupon's hair and spa services for the purpose of this blog.  Groupon has destroyed the basic framework of the Salon industry here in Seattle.  Groupon is not a friend to Salons and Spas.

Here is why:   

  • Do you know how Groupon works with small businesses like Salons and Spas? 

  • The Salon gets 1/2 of the amount taken from the transaction between you and Groupon. 

  •  A service (like a cut and foil) may sell at an amazing price like $60.  

  • The Salon only gets $30.  

  • The stylist who actually does the service typically only gets a 30% commission on whatever services are preformed.  The Stylist who is actually performing your service for less than $10 per hour - which for a cut and foil is indeed making less than $10 an hour since it is a flat rate for the service you are receiving and they are giving.  

  • Your tip means the world to them and they depend on it.  You always need to tip to the amount BEFORE  the discount.    

Salons are hoping that you will turn into repeat business and/or buy retail items from them to help make up the money lost on giving you such a great deal.

Many Groupon lovers will continue to chase the next big deal on the Groupon hair circuit, however this feeds the cycle of low pay for the Salon and Stylist that will work on your hair and are hoping you will become a regular, buying retail products.

Question:  Do you really want an underpaid, perhaps disgruntled Stylist working on your hair?  

Solution and Alternate Ideas for using Groupon:

Ask your current stylist or salon to match the current Groupon you are interested in - you might be surprised - they might just say yes!  They would like to keep your business and all of of the profits as well!

If you do use Groupon, make sure that you TIP your Stylist really, really, well on the retail amount of your service.

Use a small guy - like me!  I will always work with you and you are keeping your money local, knowing that 100% of the profits are going back into the local community.

Call or Text Arica: 425.770.8191

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