This is a cautionary tale for anyone who may think of offering a deal through Groupon, the group-buying site that promises great deals for customers and great exposure for businesses.
The idea is that, as a business, you offer a special deal on the Groupon web site. For example a restaurant may offer a meal-for-two worth £200 for the bargain price of £80. Groupon takes a 50% cut so the restaurant gets £40 which should be enough to cover the actual cost of the food, plus they’ve had some good exposure and, hopefully, the few hundred people who bought the deal will go back another day and pay full price. Maybe they’ll even become regular customers.
But look at what happened to one independent photographer in Somerset:
He offered a £200 portrait package for £29, which was bought by 301 people.
Let’s break that down…
Firstly the photographer will only get £14.50 because Groupon takes half. And if the client pays by credit card, which they probably will, then the photographer has to pay the credit card fee, so he’s only getting around £12.
Each shoot lasts one hour, but it can be anywhere the client chooses within 15 miles of Bristol city centre. So let’s suppose the total time for travel is half an hour each way, plus 20 minutes to set-up lighting and background and 10 minutes to tear it all down at the end. Already he’s up to 2.5 hours so he’s charging £4.80 per hour, not taking fuel costs in to account.
"Every photo taken will be put on CD or DVD in high resolution" — this is fairly trivial, let’s say 15 minutes work and £1 for the disc and case. He’s now getting the equivalent of £4 per hour.
But the deal gets better! "20 of the images will be professionally edited and air brushed" — now I assume this is nothing more than a bit of spot removal and some minor tweaks, because there’s no way you can do a full retouching job as part of a £29 package, and there’s certainly no way you can do 20 of them. So we’ll estimate a super-speedy 5 minutes per picture and imagine that he somehow gets the whole lot done in 2 hours. He’s now on £2.32 per hour.
Anything else included? Yes! You get "one 12×10 framed print, two 10×8 prints, two 8×6 prints, two 5×4 prints, two 4×3 prints, and two 3×2 prints" — a total of 11 prints, with the largest one framed. I’d estimate the absolute rock-bottom price for producing those prints will be £8 plus another £5 for the frame if he’s buying in bulk. That’s £13. That’s more than he’s getting from each client, and he’s got 301 clients to make his way through.
Even if this photographer is doing each job to a bare minimum standard, he has committed himself to nearly a year’s work for no money. If that doesn’t sound like good business sense to you then be very careful if you decide to offer a deal through Groupon or any similar site. What may at first seem like success could very easily put you out of business.