One of the knocks against Groupon Inc. (GRPN) is that there are few barriers to entry for competing firms to offer a virtually identical product. All it takes are a sales team and telephones. Trying to shore up its fortress walls, the company has launched a Groupon Partner Network on which it will control advertising distribution and other business that it had previously farmed out to third parties.
In a report at TechCrunch, Groupon’s vice-president of global partner marketing and business development said that affiliate placements generate the highest conversion rates of all the ways that Groupon currently publicizes and pushes its offers to users. It only makes sense then that the company would make a move to get its arms around more of it partner channel.
The initial offer to partners, which is apparently a teaser, is a deal that would give partners a commission of 10% to 12% on Groupon Local deals, 6% to 8% on Groupon Getaways and 5% to 8% on Groupon Goods. The offer is good until September 30 and likely will be cut after that date. The incentive is no doubt being paid out of savings that Groupon is making at the expense of the third-party vendors.
The company’s shares have been on a steady if unspectacular rise since mid-November of last year, when the stock price fell to $2.60 a share. Shares are trading at around $10 now, still well below the November 2011 IPO price of $20 a share.