Great point. I have also noticed the decline in Groupon quality recently for my area.
That being said, once you are the 500 pound gorilla in the market, will people really have a choice but to go through you? I don't like ebay, but I deal with it because that is where everyone is. There must be some point where the hassle or loss of income is overcome by the potential benefits of advertising through Groupon. Even if that means they may have to tweak their % taken some, I could still see them being wildly profitable.
The choice there is not to go through anyone at all. It's not like all businesses wanted to hold flash 75% sales and just didn't know how before Groupon.
I'm not a business owner, so I can't talk authoritatively on the subject, but I think there's something in the combination of wide audience and well-known number of pre-paid vouchers that make GroupOn more attractive than old-world sales marketing. Then there's something in their skimming 50% off that's quite less attractive.
I'm not sure this is well-known, and it doesn't appear to be given the comments here, but Groupon offers a self-service option (i.e. not "featured") where their take is just 10%. I feel that is a relevant, and often overlooked, option for those businesses with typically lower margins.
I don't do deals myself, but I find the trend interesting.
That being said, once you are the 500 pound gorilla in the market, will people really have a choice but to go through you? I don't like ebay, but I deal with it because that is where everyone is. There must be some point where the hassle or loss of income is overcome by the potential benefits of advertising through Groupon. Even if that means they may have to tweak their % taken some, I could still see them being wildly profitable.