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Merchant Profitability for Groupon Stores (Self-Serve)

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By Yipit.com

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DriversGross Profit / Voucher

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Deal AssumptionsExisting Customers

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Deal Value$50Revenue from Groupon$19.7

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Deal Discount50%Revenue from Overage6.1

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Deal Price$25Revenue from Existing Customers25.8

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Overage %14%Less: COGS20.4

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Commission %10%Less: Cannibalized Revenue7.4

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Cost of Goods Sold %40%GP from Existing Customers($2.1)

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Credit Card Fee %2.5%

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GP from Breakage$0.0

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Buyer Mix Assumptions

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Unredeemed (Breakage) %0%New Customers

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Current Customer %90%Revenue from Groupon$2.2

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New Customer %10%Revenue from Overage0.7

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Revenue from New Customers2.9

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Repeat Visitor AssumptionsLess: COGS2.3

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Conversion to Repeat %19%GP from New Customers$0.6

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Repeat Visits3

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Vouchers per Customer1.5Follow On Visits

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Current Customers Already Going30%Revenue from Repeat Customers$2.2

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Less: COGS0.9

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GP from Follow On Visits$1.3

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Merchant Profit / Voucher($0.2)

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Notes

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1. Conversion to Repeat % is a function of non-existing customers who redeemed voucher, i.e., net of Breakage, Existing Customers, and quotient of vouchers per customer

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2. Other inputs based on a survey of Yipit's survey 100 small businesses, and industry research.