Groupon IPO: Merchant-Partners to Benefit

Groupon's impending IPO could be a boon for the merchants that offer their discounts to the daily-deals site.

Sucharita Mulpuru, principal analyst at Forrester Research, said that with Groupon's financials coming to the public eye, the company will "be forced to grow very aggressively."

That will ultimately lead to more aggressive deals, with more favorable terms given to merchants, she said.

For Groupon, that means costs and marketing expenditures will increase, further pressuring its margins.

For the merchants that work with Groupon, it could mean better terms and less risk of offering deals that are loss-leaders.

A number of Groupon's partner-merchants have complained publicly about deals being oversold, and then having to manage hoards of one-time customers who cash in on the discount and are never seen again.

Read Full Article from TheStreet.com

- Posted: 2011-06-03 11:06:39

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