A Berkshire baker claims she has lost her entire year’s profits after posting a deal on money-saving website Groupon.
Rachel Brown, owner of bakery Need a Cake, advertised a 75% discount to the website’s subscribers but underestimated the demands she would receive. Marketing 12 cupcakes at a cost of £6.50 instead of the usual £26, Brown had to cut off the orders at 8,500 requests and ended up losing almost £3 for every batch she sold.
The entrepreneur told The Telegraph: “As soon as we were making, packaging and sending the cakes out, we were on to the next order. It was non-stop.”
Normally producing around only 100 cupcakes per week, Brown was forced to take on additional staff to fill the orders, resulting in an extra £19,500 in shipping and labour costs.
Reflecting on the discount nightmare, the business owner added it was “without doubt, the worst ever business decision I have made”.
Troubled online discount firm Groupon has announced it is has put on hold $25bn plans for initial public offering (IPO).
Citing market volatility the online discount firm told the Wall Street Journal that it was putting its plans on hold.
The sudden U-turn follows the leaking of a controversial email from Andrew Mason which criticised Groupon’s critics, an outburst which is believed to have angered financial regulators.
Criticism of Groupon’s accounting and long-term prospects following reports of liquidity trouble, fierce competition from Amazon and a failure to penetrate the Chinese market.
