Saturday, November 26, 2011

Groupon Horror Bakery Must Make 102 000 Cupcakes

Cupcake calamity: GroupOn discount deal leaves baker swamped by orders for 102,000 CAKES and wipes out her profits

    * Cake shop owner received 8,500 orders after offering the discount voucher online
    * Box of cupcakes usually sold for £26 offered at £6.50 - with a £2.50 loss on each box
    * 'Without doubt, it's the worst business decision I've ever made,' says owner Rachel Brown

After 25 years in the baking business, Rachel Brown knew her exquisitely decorated cupcakes were popular. She just didn’t realise how popular.

So when she decided to drum up a little extra trade with a discount deal, she bit off more than she could chew.

Swamped by orders, Mrs Brown, who normally makes 100 cupcakes a month, found herself having to bake an astonishing 102,000.

And disastrously, because her deal had been so generous and the demand so huge, she made a loss on every order – wiping out her profits for the entire year.

The cupcake catastrophe started when the 50-year-old cook posted a deal on money-saving website Groupon.

Groupon Deal Burns Small Bakery With Orders for 102,000 Cupcakes

The owner of a small bakery outside London claims she had to make 102,000 cupcakes when a deal she posted on Groupon took off online, according to reports.

Owner Rachel Brown offered a 75 percent discount on the money-saving website for 12 custom cupcakes, which typically sell for $40 and were available through Groupon for $10, the Telegraph reported.

Brown was prepared to fill a couple hundred orders, but when 8,500 poured in, her small staff at the Need a Cake bakery was inundated and unable to keep up with the demand.

Brown told the Telegraph she lost over $3 on each batch and had to hire additional help to fill the orders at a cost of $19,500, cancelling out a full year’s profit on the business.

“It’s been an absolutely nightmare,” she said in an interview with the Telegraph. “Without doubt, the worst ever business decision I have made.”

Groupon, the money-saving website which offers daily deals for as much as 80 percent off the original price, has soared in popularity since it launched in 2008. Now in 43 countries, deals are available for everything from dinners to dance lessons, weekend getaways, even medical procedures, and have meant big savings for online bargain hunters.Groupon Horror Bakery Must Make 102 000 Cupcakes


Post a Comment