Shoppers love Groupon. Retailers…not so much. It’s easy to see why. You offer your product or service at a deep discount to grab users’ attention. Then Groupon pays you about half that discounted price. Then a zillion Groupon shoppers come into your store so you have to sell out all your inventory at that teeny-tiny price. Then none of them ever come back to buy anything at full price.

The secret ^[1] to loving Groupon is, “Don’t be stupid,” according to ZDNet blogger David Gewirtz. In other words, calculate carefully exactly how much of a discount it makes sense to offer–and then don’t offer more than that. If you don’t you could share the fate of his correspondent in London who owns a gourmet cupcake shop. She and her employees wound up killing themselves churning out 102,000 cupcakes for Groupon customers at a loss of about $3 each.

Read more at ZDNet ^[1].