I think a key difference between Groupon and Amazon is the opportunity cost. Amazon spent tremendous amounts on warehouses and inventory, among other hard costs. Groupon has mostly burned through their money on customer acquisition.
Amazon spent a lot of money on developing an online shopping system that has a high degree of reliability, ease of use, and functionality. Groupon's web functionality appears to be something that cloners can copy pretty easily.
This past week, I saw that my local "alt-weekly" newspaper was launching their own Groupon clone. If they can do it, it obviously doesn't cost millions; thus, the barrier to entry is low.
Even worse for Groupon, potential competitors, such as the alt-weekly, already have sales staffs; their salespeople can sell the "daily deal" proposition as an add-on to their advertising offerings. They already know the local market, which is another advantage in competing with the out-of-town giant that has to learn it.
One need not really go too far to justify Amazon vs. Groupon, because Amazon is an outlier. If you're trying to convince that I should invest in your business, and your best argument is that you might be able to be as good as Amazon if I just give you a chance, my wallet will be closing tighter, not opening. You're throwing the Hail Mary. Good luck to you, but you'll be doing it not with my money. Hail Mary is an exciting play on the football field when it works, precisely because it usually doesn't.
Amazon spent a lot of money on developing an online shopping system that has a high degree of reliability, ease of use, and functionality. Groupon's web functionality appears to be something that cloners can copy pretty easily.
This past week, I saw that my local "alt-weekly" newspaper was launching their own Groupon clone. If they can do it, it obviously doesn't cost millions; thus, the barrier to entry is low.
Even worse for Groupon, potential competitors, such as the alt-weekly, already have sales staffs; their salespeople can sell the "daily deal" proposition as an add-on to their advertising offerings. They already know the local market, which is another advantage in competing with the out-of-town giant that has to learn it.