Article: Why Groupon Is Poised For Collapse
Business By jason_kraft Updated 29 Jun 2011 , 10:18pm by KoryAK
Restaurants and bakeries typically have net profit margins in the 5-10% range. A 20% net profit margin would be considered excellent.
A 45% gross margin is certainly feasible, but the gross margin ignores non-COGS operating expense.
Whew, I was feeling like I was doing my math wrong 
Where does this statistic come from? Do you have a website or research you could point to? I'm always trying to make sure I'm structured okie dokie and have not found anything (so far) that says this.
If you want to see detailed info you can look at analysis reports for the industry (you have to pay for them though):
http://valuationresources.com/Reports/SIC5461RetailBakeries.htm
A number of different numbers for average net profit in the restaurant industry in general are thrown around, but all are between 5 and 8% (one example below). Margins for bakeries would skew slightly higher than restaurants due to lower costs for ingredients and payroll, the second link shows an 18% net margin for a cupcake business.
http://findarticles.com/p/articles/mi_hb5248/is_3_25/ai_n29406237/
http://boss.blogs.nytimes.com/2009/11/25/are-cupcakes-a-viable-business/
Home-based bakers are a different story...if priced correctly a home-based baker could probably pull off a (warning: SWAG) 25-30% net profit margin, but the average would likely be pulled down since so many home-based bakeries ignore labor and overhead costs and thus operate at 0% or negative net margins.
Just found this source from 2009 research on full-line bakeries from Modern Baking, 6% average net margin:
http://modern-baking.com/retail_baking/retail-bakers-upbeat-0609/index3.html
I am the type of Groupon user that businesses don't want, and because I know plenty of people like me, I wouldn't use Groupon for my business.
I buy a Groupon for items or places that I can't normally afford, or normally think are too expensive, or can't justify in my budget unless it's a really great deal. I've bought bouncy place admissions (normally too much $$ for both kids), massages (that I would never ever never ever pay full price for), restaurant deals (at places we can't normally afford), etc. And I have never gone back to those places even if I liked them because I can't/won't pay full price there.
This is exactly the kind of consumer I am as well.
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