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Comment by systemtrigger | Hacker News Reader

A Sr VP of a well-known sports equipment brand told me he was planning to create a new product for the sole purpose of selling it on Groupon - in order to maximize his profit margin. The product will be virtually identical to a competing product in his line.

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I run a b&m store and this is common behavior. A store re-arranges an existing product so that it looks a little different, puts it up as a premium product with a very high price and for limited-time only, then offers that item, and only that item, for a Groupon.

What does b&m stand for?

edit: brick and mortar, the googles say

This is common. Sometimes it's done in a way so it doesn't pollute the main brand, sometimes it augments the main brand, usually it's cheaper and the has different margin metrics. A lot of things that Costco sells are like this -- I used to work at an online retailer that also shipped to Costco out of the same warehouse and we had a bunch of one-off brands that sold solely through Costco. You may have seen Converse One Star Chucks at Target. AFAIK, only Target sells the One Stars, it's the Target Converse brand, and they are significantly cheaper than regular Chucks but are almost identical visually. The main Converse brand is the All Star, which is sold through their regular shoe retail channels. They are in some sense competing with themselves on price, but they can still end up with the sale, because some portion of the demographic is more price sensitive than brand sensitive.

yeah but costco generally gets very good deals in place; i've cross checked it numerous times.

once groupon management catches wind of this it will be fixed; they can't afford the damage to their brand

that's how all of those black friday deals work as well.

It's funny - I went out shopping in the US on black Friday, as a holiday experience when visiting - and bought nothing, because I didn't think anything was a good deal.

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