Groupon Deals: Good or Bad for Your Supplements Business?

Ever since 2008 when Groupon became an international phenomenon, opinions whether using it could benefit or hurt your business have been highly polarized. Yet the discount buying site has been hugely popular with consumers.

In reality, Groupon can either make or break your business; you can either create a small but loyal new-customer base, or lose money in the process. Striking a balance with Groupon is not easy, but it’s not impossible, either.

And if some businesses fail to take advantage of the discount craze, it’s because of a rushed decision to participate or miscalculated expectations. So, before you plunge in, do your research and think about what Groupon really is and how you can use its resources to move your private label supplements and gain new customers.

To help you get oriented and make the best decision for your business, consider which products it’d be best to discount. Should you combine any of your seasonal supplements or skincare products, or your sole purpose in using Groupon is to spread the word about your business – it’s up to you to decide.

Get acquainted with Groupon below and read our tips to help you answer these questions.


#1. How Does Groupon Work?


As a daily deals site, Groupon offers bargains from local businesses for discounted goods, services or events. Deals change every day, but only a certain number of consumers can purchase a coupon for a deal. The promotion is only valid if the offer is sold out within 24 hours. If the minimum sales are not reached, no one gets the deal that day.

Groupon profits by keeping half of the money the customer pays for the coupon. So let’s say that you are trying to promote sports supplements, discounted from $100 to $50. When the customer pays the $50, the money will be split in two between you and Groupon. You’ll pocket $25 in total.

Sometimes, the discounts may reach up to 70%. In other words, Groupon is expensive, despite the fact that it makes the whole process look like it’s a free favor for the merchant.

On the whole, if a small business is tight for cash, the Groupon deal seems like a quick fix with minimum risk. It’s easy to look at it as a marketing campaign where no cash up front is required and where you get fast cash and lots of new customers.

Maybe. But critics of such Groupon practices warn small business owners to use extra caution when signing the merchant agreement for possible pitfalls. Make clear who is paying the applicable taxes and on what. Ask when your offer is scheduled to run, because the date you sign the agreement is not the same as the start of the deal promotion. You may need some time to prepare for the potential influx of customers. Read the small print and ask all the questions you may have before you sign.


#2. Will Groupon Work for Your Business?


As a business owner selling private label supplements, you need to consider the following points:

  • Think carefully about what kind of products you want to promote with Groupon. If you have a large stock of supplements that have spent quite some time on the shelves, reflect on why they didn’t sell in the first place. Were they not popular with your clients, or did you not manage to advertise them successfully? If the former is more valid, then consider combining the supplement with something more in demand, so you can move some of your supplies.
  • Think about whether the huge discount you’re offering will or won’t set you up for failure. It might translate into the loss of a lot of money. The thought of receiving a check in the mail in just a few days is quite attractive, but when you start filling those orders, you may realize how unprofitable that heavy discount really is. In some cases, Groupon may not be the best solution for your business even though it’s tempting to try it.

  • Think about what it is you want to accomplish by using the deal site. Consider if it wouldn’t be better to plan a more thorough marketing campaign and allot a proper budget for using Google AdWords, Facebook, Twitter and other social media channels.
  • Think if the Groupon frenzy will not devalue your brand in some way. You don’t want your clients to think that if you are willing to give such hefty discounts, perhaps your products are already overpriced. The other side of the coin is that it may deteriorate the monetary value of your products permanently, for your clients may never want to pay the full price again. Instead, they might wait for the next coupon, even if it comes from another company.
  • Think if the Groupon deal will not hurt your existing and loyal customers. It’s a very delicate issue, actually. One of the great misconceptions about Groupon is that it helps businesses build an army of new customers. In reality, however, most people use Groupon only when they see something they need or want for a very low price. Surveys show that most Groupon users don’t return to the same business, unless they see another low-priced product or service. Having said that, you wouldn’t want to alienate your loyal customers by giving large discounts only to the new ones. Asking them to still pay the full price to make up for your losses is just bad way of doing business. You should award your loyal customers with some discounts and other perks, too. Plus, there’s nothing to stop your regulars from buying coupons offered by your competitors and abandoning you altogether, if they choose.


#3. When Is Groupon Good for Your Business?


Well, it’s no secret that most Groupon users are female. That’s why a lot of the discounted offers refer to fitness, wellness, and beauty products. Take a look at your inventory and consider what can be appealing to that large untapped pool of female customers at the time of your offer. Spring on the cusp of summer is usually perfect timing, because women look for ways to look their best on the beach or in their light summer dresses.

There are endless possibilities – private label cellulite creams paired with Breast Enhancement Creams (both are always in demand); a Pre-workout Formula combined with an energy booster; vitamins combined with Weight Management supplements, and Skincare products such as scrubs, cleansers, eye gels, or moisturizers bundled in twos or threes. You don’t have to make combinations of different supplements; it all depends on how many products and what quantities you want to move. Just make sure you don’t discount your best-sellers, because then you’ll likely be losing money.


#4. Some Useful Tips on Using Groupon


If you decide to try the discounted site, here are some additional tips to think about in order to turn your Groupon campaign into a success:

  • Calculate carefully whether a 50% or 75% discount would not cause you to lose money in the end.
  • Cap the number of coupons, because you don’t want to get overwhelmed with thousands of orders to fill.
  • In that respect, make sure that you have enough product to meet the demand.
  • Create a database with your customers’ emails, so you can send them updates with your upcoming sales and promotions. Give them your social media accounts and website, nicely printed on a business card, along with their purchase.
  • Advise your staff to treat all customers with equal care. Sometimes Groupon users complain that they’ve been treated with indifference and neglect just because they are often perceived as one-timers. Your goal is to achieve a repeat business trend, so you wouldn’t want to push new customers away with bad customer service.
  • Come up with a follow-up strategy for after the Groupon campaign. Offer another discount a month later, this time no more than 10%, even on well-selling products. That way you can invite your Groupon customers over once again and show them you care.


#5. Final Thoughts


Groupon is neither only bad nor only good. As a business owner your goal is to expand your business and attract more customers. Groupon may be a great stepping stone along your way, only if you consider both the pros and cons and do the math. If Groupon is not financially suitable for you in the long run, then maybe you should pass for now.

If you need to clean up your inventory, perhaps a one-time deal isn’t going to hurt you. Whatever your decision, know that we at Private Label Supplement are doing our best to help you grow and prosper. You can count on our professional advice and expertise.
Call our sales team at 855-209-0225 ext. 2 or email us at with any questions you may have. We are always here to help!

All my best,
Stefani Thionnet
Stay focused and never give up!

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Stefani Thionnet

Owner & CEO, Private Label Supplement, Private Label Hemp + CBD Products, and StartUp TakeOff. A cowboy entrepreneur, a nearly three-decade veteran in the health & wellness industry, Stefani thrives on Clients’ success and is relentlessly seeking new ways to deliver quality GMP product that furthers a company’s marketing and drives volume with the confidence that comes from successful strategic partnerships. With an inventive, innovative approach to product development and a commitment to Client relations, her professional motto is, “If we are lucky enough to fill one order but haven’t earned your repeat business, we haven’t done our job.” Thank you!

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