Large Groupon Discount Leads to Excessive Cupcake Baking

Group discounts can be a nice thing for both the seller and the customers, but one has to know his limits. A London baker learned that the hard way, when she was forced to bake 102,000 cupcakes, after offering a 75-percent cupcake discount on Groupon.

The discount obviously sounded too good to Groupon, 8,500 of which signed up to buy 12 cupcakes for £6.50 ($10), down from the standard £26 ($40) price. Rachel Brown, which operates the Need a Cake bakery in London, had no choice but to hire extra workers and try to bake the cupcakes to satisfy the swarming customers.

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“Without doubt, it was my worst ever business decision. We had thousands of orders pouring in that really we hadn’t expected to have. A much larger company would have difficulty coping,” said Brown, who lost up to £12,500 ($20,000) on the deal.

“We approach each business with a tailored, individual approach based on the prior history of similar deals,” Groupon‘s international communications director Heather Dickinson told the BBC, adding that there was no limit to the number of vouchers that could be sold.

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We’ve heard of small businesses having similar experiences before, and many of them aren’t too happy with Groupon. The lesson is clear: Groupon is a business tool like any other, it’s not for everyone, and its use requires careful planning – too large a discount, for example, can have unwanted consequences.

Image credit: Flickr, kristinausk

[via BBC]

This story originally published on Mashable here.

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