Earlier today, Groupon released its first quarter 2012 performance. The company beat expectations, and the market responded in kind with the stock soaring over 15% in after-hours trading, adding to a 19% gain during market hours.
The most surprising detail was that Groupon’s take rate, or merchant commission, actually increased. Many predicted Groupon’s merchant split to shrink given to their fiercely competitive, no barrier market, and the huge success of their low-margin Goods product.
Nevertheless, Groupon has expanded take rate by over 10% in two quarters, from 37% in Q3 2011 to 41% in Q1 2012.
How could this be possible?
Groupon Goods is potentially more profitable than everyone thinks
Based on our proprietary data, Groupon Goods now represents 10% of the company’s North American business, up from 6% just last quarter. Groupon’s massive distribution and ability to instantly monetise large quantities of unused inventory may have given Groupon more negotiating leverage, and take rate, than everyone assumed.
Get access to Yipit’s proprietary data
Yipit tracks the global performance of Groupon, LivingSocial, Travelzoo, Google Offers, Amazon Local and hundreds of other daily deal sites. Yipit licenses its data to leading investors and daily deal companies to provide real-time updates of market and player performance. To access Yipit’s data contact [email protected].
Sean Spielberg is an analyst for Yipit Data, which provides estimates of Daily Deal Industry performance based on proprietary deal-tracking technology, rigorous testing of historical data, and industry insight.
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