Groupon Launches "Groupon Goods"

By Chuck Sudo in News on Sep 30, 2011 2:45PM

Groupon quietly rolled out a new program, "Groupon Goods," which is the online deal-a-day giant's dipping a toe into the deep end of the e-commerce pool currently inhabited by online retailers such as Amazon.com and Overstock.com. The move may also be seen as tailored to impressing potential investors for whenever Groupon is given a green light by the SEC to move forward with its IPO.

NBC Chicago resident shouting head David Wolinsky wrote yesterday Groupon Goods is proof the company does "more than just draw doomy speculation from the press and actually still rolls out new initiatives" and even links to Groupon Good's FAQ page. You'll need some Malort to get the taste of "the Groupon style" out of your mouth.

To get airspace on Groupon Goods, a product has to be cool enough to share and innovative enough to inspire. It also must be made of reliably bonded molecules and stardust.

Honestly, if we think a product is remarkable and we can offer a good deal on it, we'll do so.

Should Amazon and other e-retailers be worried. We don't think so. What Wolinsky didn't point out is that Groupon is still sticking to its increasingly criticized business model for Groupon Goods even as it establishes itself as a competitor to Amazon. Further down in the FAQ, it reads (emphasis ours):

Once you've bought your Groupon, you can redeem it in one of two ways, depending on the deal:

1. Code: You'll receive a code that can be entered on the website of the merchant selling the product. Once you do so, they'll ship the product to you.
2. Drop Shipping: You tell us your address at the time of purchase, and we'll pass it along to our business partner, who'll ship the product to you.

Groupon is still pitching the "do business with us" model. what makes Amazon an attractive e-retailer, besides cheaper prices, is that the company has invested serious capital into a distribution and sales infrastructure, thereby allowing them to keep their prices to the consumer low. They aren't just arbitrarily saying to a vendor, "cut fifty percent off the standard price and we'll split the revenue." If Groupon takes some of that expected IPO revenue and invest it into a similar system, then Amazon may have reason to worry.