I thought these stories were a thing of the past. Today I got an email from an auto-detailing company in my area, from whom I’d bought a daily deal months ago. The email said the deal put them out of business.
The deal apparently sold so many units they couldn’t service everyone before the expiration date; there weren’t enough appointments. So they extended the period. I made an online appointment for months later than I would have liked to.
But Amazon Local (LivingSocial), which sold the deal, later offered deal buyers refunds. I took one and cancelled my appointment. That was earlier this year.
Today I received this email:
We are writing to inform you [Business Name] Mobile Auto Detail has closed. We found it impossible to service all daily deal customers in a timely and cost-effective manner. As the daily deals were offered at such a tremendous discount (net profit of 25% standard rate), we quickly found ourselves operating in the red.If your vehicle was not serviced, please contact your daily deal provider for a refund.
We apologize for the inconvenience.
These stories were more common in the early days of daily deals a few years ago when SMBs weren’t clear on the economics of running them. But I thought most SMBs had become more savvy or were steering clear of aggressive daily deals entirely.
I was quite surprised frankly. I wonder if something like this is grounds for litigation. Probably not however.