Merchant Innovation

Groupon Lanches Goods Marketplace

Groupon’s evolution from online coupon site to traditional e-tailer seems to have moved another small step forward this week with the understated announcement of a new marketplace for goods.

The new concept – Groupon Stores –  will give any retailer a new location from which to hawk their goods – if they are willing to discount the goods enough.

According to reports, stores that are part of the beta program have been informed that their goods must be at least 5 percent cheaper than they are at other e-tailers.

Groupon will also be reportedly taking a 15 percent cut of these sales.

“This is a huge, untapped opportunity for us to turn the Groupon marketplace into even more of an online and mobile shopping destination by increasing our inventory and bringing the power of our platform to even more merchants,” Groupon PR chief Bill Roberts said in an email.

Selling goods has been good for Groupon since it first launched its Goods business in 2011. A year after launch, the subunit of the business accounted for 33 percent of Groupon’s revenue; by 2014, that ration has shifted even further, with Goods providing 56 percent of total revenue. All in, the service brought in $1.8 billion in 2014, up more than 55 percent from 2013. 

About a year ago, Groupon introduced a self-service tool that empowered merchants to set up traditional Groupon deals on the fly without the involvement of a Groupon rep. CEO Eric Lefkofsky has said the firm’s multi-year mission is to transform Groupon from a deals company to an online merchant.

“Unlike Amazon and eBay, the Groupon Stores marketplace is meant for a select number of your products that you’re looking to liquidate or promote through a discount,” the FAQ part of the website says. “There are no listing fees, but we do require that products be placed at lower prices than Amazon, eBay, or anywhere else they may be listed online.”

As currently conceived, the new program will also redo the logistics of online shopping through Groupon. Up until now, the vast majority of items sold on this through Groupon are warehoused and mailed by Groupon – which historically has eaten up profits.

Groupon Stores orders, on the other hand, will be fulfilled and shipped by the merchant.

“Their focus on the value-oriented buyer and having the best price on the Internet is an interesting approach that fits their brand,” said Scot Wingo, CEO of Channel Advisor, which helps online sellers automate the sales of goods on multiple eCommerce marketplaces. “While we don’t support the new Groupon Stores, we are keeping a close eye on it to see if it gets traction with buyers and merchants.”

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