Updated: Sep 25, 2020
Local Commerce Platforms
Groupon and TaDaah are alike in that we both seek to connect customers with local commerce. Local businesses list deals, promotions, vouchers, experiences, etc. on the platform that then generates foot traffic and sales at brick-and-mortar establishments like local restaurants.
Aside from the fact that we are both platforms focused on enabling local commerce, we share very little in common. How we make money, the solutions we've created and the way we help our local business partners succeed are fundamentally different.
How Groupon Makes Money
Groupon has approx. 38M+ active customers (customers who made a purchase from Groupon in the past year). [Source: Groupon Fact Sheet]. For every customer purchase, Groupon takes approximately a 50% cut of each purchase (each Groupon sold). [Source: Investopedia].
For example, assume a local restaurant is experiencing a slump in sales due to COVID-19 and decides to offer a discount on their Meal for 4 deal to attract new customers (or bring back existing customers). The regular price for the Meal for 4 deal is $100, but for a limited time, the restaurant is selling it for $50 on the hope that it gets customers re-engaged post-pandemic.
If the Meal for 4 deal is offered on Groupon, Groupon will take 50% of the sales revenue from every Meal for 4 deal sold through Groupon ($25 per sale). In other words, if the Meal for 4 deal attracts 30 new and existing customers and generates $1,500 in revenue for the restaurant, $750 goes to the restaurant and $750 goes to Groupon.
How TaDaah Makes Money
Unlike Groupon, local businesses like the restaurant in the above example DO NOT share their revenue with TaDaah. Our local commerce platform uses a flat fee or subscription-based pricing model (just like your Netflix, Spotify or Slack subscriptions).
In the example above, the restaurant could elect to (1) use our free service and place their Meal for 4 deal on TaDaah at no cost (TaDaah Free), or (2) get enhanced features and support by upgrading their free plan to one of our premium plans (e.g., TaDaah Standard). The restaurant would pay a flat monthly fee of $20 and keep 100% of the revenue that they generate from the Meal for 4 deal that they sell via TaDaah ($1,500 in the example above not $750). The $20 is paid on a monthly subscription basis per restaurant location and can be cancelled at any time.
Which is better for your local restaurant?
Well, it depends. Since Groupon was launched in October 2008 (and TaDaah is launching in October 2020), Groupon clearly has a head start as evidenced by its 38M+ active customers. If you need access to an immediate audience and can afford to share 50% of your sales revenue on an already discounted product, service, etc., then Groupon is likely the better option for your restaurant.
However, if you want to partner with a platform that (1) designed a solution for a post-pandemic world that allows you to get started for free, (2) allows you to keep 100% of revenue generated, and (3) provides your local restaurant with an instant mobile app, then TaDaah is the better solution for your local business. Get started for free and email us at firstname.lastname@example.org to let us know what you think.
Learn more at www.tadaah.app.