A little while back Groupon announced a new platform called Groupon Stores. Essentially, merchants will have their own page on Groupon’s site where they can post their own deals at any time. What does that mean for us? Well, at any given time in the highly competitive consumer goods market, consumers will be able to find their desired product for at least 50% off. In other words, if this is rolled out on a large scale, Groupon is effectively cutting the market value of consumer goods in half.

What’s even worse for businesses is that 10-50% of the discounted price goes directly into Groupon’s pocket. Is that all? Nope. The merchant will only receive credit for those deals that are redeemed (aka only when they incur costs).

If I’m in one of Groupon’s target market industries of, say, Spa services, I’m worried. I just saw my unit revenues get slashed between 50-75%.

Of course, it’s not that clear cut and I’m certainly overstating the immediate consequences. That being said, the “social buying” frenzy is making a dent on the economics of consumer goods and it is definitely worth exploring further. For more details, check out Business Insider’s article here and Groupon’s merchant page here.