> They take title in the sense that they are paying (although paying late) and buying a certain amount of product (after they have received orders.) A commission would be if the same thing happened and the restaurant forwarded x% of the sale to groupon.
No, they work on a commission--the product they sell is the future services/products of a company who they have agreed to sell on behalf of. It's like TicketMaster collecting money for an event and then paying the promoter in a lump sum less agreed upon commissions (and yes, TM only counts their take as revenue).
Groupon doesn't buy a certain amount of product, they collect revenue and then pay out based on receipts. No products are purchased, they're simply a third party affiliate that has an email list and sales force.
> Here's an example. You are a programmer and I send you a customer. The customer gives you $5000 worth of work. You pay me $500. So you collect the money and pay me a commission. Other way: I get the $5000 from the customer (I have the contract with them) and pay you $4500 for what you have done (and have added risk etc.)
That's a horrible analogy. A better one is you make an agreement with a programmer who has a software package. You will sell the software for an agreed upon price and then split the proceeds 50/50. Your revenue is whatever your cut is, you're working on commission. This is exceedingly common online for affiliate programs, the only difference is Groupon approaches the business about starting the affiliate program just for them.