My Groupon nightmare! Baker who sells 100 cakes a month is forced to make 102,000 after bargain hunters flock to her 75% off web deal


Sour taste: Cake maker Rachel Brown outside her company Need A Cake, in Woodley near Reading. She was besieged with more than 8,500 requests after placing a discount deal on money-saving website Groupon

Rachel Brown just wanted to drum up a bit of extra trade for her tiny company when she offered her specialty cupcakes on discount coupon website Groupon.

But the businesswoman found she had bitten off a great deal more than she could chew when 8,500 customers took up her offer, forcing her to increase production from 100 cakes a month to a staggering 102,000.

The unexpected popularity of the deal meant she had to bring in 25 agency staff who worked day and night to produce the cakes, and the cost wiped out her entire year's profit and nearly made her go bust.

Rising to the occasion: Mrs Brown's staff worked night and day to meet the extraordinary demand

Mrs Brown offered subscribers 12 cupcakes - normal price £26 - for £6.50, a discount of 75 per cent, and expected a few extra orders.

But her small business, Need A Cake, in Woodley, near Reading, Berkshire, was overwhelmed by the response.

Need A Cake, which employs eight people, had to bring in up to 25 agency staff who worked into the early hours to meet the huge upsurge in demand.

Sinking feeling: Need A Cake, which usually employs eight people, had to take on an extra 25 agency staff to meet demand, and in the process wiped out all the profits for the year

Mrs Brown, 50, made a loss-making £2.50 per order and paid £12,500 for the extra costs of staff and distribution, wiping out her profits for the whole year.

She said: 'Without doubt, it's the worst ever business decision I have made. It's been an absolute nightmare.'

U.S.-based Groupon offers coupons to its subscribers, which gives them huge discount deals on anything from restaurant meals to spa treatments.

Fallout: One of Mrs Brown's employees Jo Walsby was given the unenviable task of fielding calls from angry cupcake buyers whose orders were taking longer than expected to be fulfilled

Companies that sign up to the group-buying website hope to gain new custom out of the deal or sell extra goods during their visit.

Mrs Brown's offer on the Groupon website stated: 'Twelve Cupcakes with a Choice of Flavours and Designs for £6.50 from Need a Cake. Value £26.

'Today's deal gets Groupon gourmands twelve individually decorated cupcakes from Need a Cake.

'Customers can construct their ideal cupcake, choosing from sponge flavour, icing and decoration options.'

Boxed in: Need A Cake usually sells boxes of cupcakes for upwards of £26, meaning a £2.50 loss was made on each of the £6.50 Groupon offers

source: dailymail


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