Groupon Schmoupon – Why we cannot afford to do a Groupon ------
Don't get me wrong. I think Groupon is a great way to promote a new restaurant or in the case of a medical spa, to offer a treatment like a microdermabrasion. For a restaurant, food cost is typically 10-15% of the price that the restaurant charges and server salaries are extremely low, since they make most of their money on tips. A medspa could offer a nice Groupon on a microdermabrasion because the cost would be the raw material cost of the crystals ( a few cents ) and the salary of the Esthetician. But the economics of a Botox Groupon is a different story.
Today (December 14, 2012), I woke to find in my email box another Groupon about Botox in the Denver area. The Groupon goes something like this: 50% off Botox treatment - $300 value for $149, includes up to 25 units of Botox.
First off, let’s do some math. Now I know many, people are not good at math, but I am not one of them, because 1. I am Asian, and 2. I am also an entrepreneur. At a value of $300 for 25 units of Botox, cost per unit is $12/unit at their regular price! So their cost per unit is 33% to 50% more than what you would pay at Happy Clinic Denver. Not so much a great value at regular prices for your hard earned dollar. So their Groupon Special would give you the Botox at $6/unit. Seems like a great deal for you right? Here I have to agree with you. It is a great deal for you at $6/unit. But It is a terrible deal for the clinic… Every business that puts out a Groupon has to pay Groupon a little bit over 50% of the value of the deal. So a little over $75 of the $149 paid to Groupon, it gets to keep, and it sends the remainder to the clinic who is offering the deal. Thus, the clinic makes $3/unit off of the deal. No business can afford to stay in business this way. FYI, ALL clinics whether they are a Black Diamond provider(like we are) or a new account pays essentially $525 for a 100 unit bottle of Botox (Black Diamonds get only an 8% rebate), so their cost on the Botox alone is $5.25/unit, without factoring in any other additional cost of running a business, rent, hiring an injector, etc… Here is a quick breakdown:
$149 for 25 units of Botox ($300 value)
Normal Price: $12/unit
Groupon Price: $6/unit
Gross Profit for clinic: $3/unit
Wholesale Price of Botox: $5.25/unit
Clinic loss per Groupon sold: -$56.25
In other words, for every Groupon that they sell and that is redeemed, they are losing a minimum of $56.25 just from the cost of the product alone. Let’s say they sell 100 Groupons, they have just lost $5,625. Let’s say they sell 1000 Groupons, they have just lost a minimum $56,250. No business can sustain that kind of loss and survive. Unless… 1. They really, really, really upsell you when you come in on their other products and services to make up for the loss. 2. They impress you enough to retain you as a customer and you come back to them in 3-4 months for your next Botox treatment at their normal prices. So I checked on Allergan’s website at www.botoxcosmetic.com and this clinic is NOT listed on the top 50 websites in the Denver area doing Botox. The website is ranked by volume of original Botox Cosmetic sold to each clinic, and Happy Clinic Denver is currently ranked at #1, meaning we purchase more original Botox Cosmetic from Allergan than any other clinic in the Denver. Because the clinic that is offering this Groupon is not even listed on the top 50, it would lead me to believe that: 1. They are a brand new clinic and have not established themselves yet (there are over 200 places that do Botox in the Denver area).
So if I were a savvy consumer, I might just buy this Groupon for the great deal. I would then sit on the Groupon for awhile, say 4-5 months and check back frequently at Botoxcosmetic.com to see if I can find their name on the top 50. If they are an unestablished clinic, and they sold 500 of these Groupons, and they are buying original Botox Cosmetic from Allergan USA, their name should start to rise on the list of top 50 clinics on Botoxcosmetic.com. Only then would I come in for a treatment, being assured that they are buying original Botox Cosmetic from Allergan USA. The other consideration is how good the injector is. It is like getting your hair cut. You go to a bad stylist and you come out with bad hair. That is why most people that really care about their hair keep going to the same stylist every time, because they trust that stylist’s abilities to cut their hair right. Two stylists may be using the same pair of scissors, but the results may be dramatically different. If the name of this clinic does not rise on the Botoxcosmetic.com website, then I would call Groupon up and demand my money back.
Last but not least of all, since Botox is a prescription medication, it is regulated by the FDA and all the laws that go with a prescription medications and the practice of medicine. There is such a thing as Stark Laws, that make it illegal to offer kickbacks to other doctors and companies that send referrals to the doctor that is doing the treatment. This is called FEE SPLITTING and it is ILLEGAL for both the doctor and the company that is referring the patient. So in the end, it really is up to the consumer to decide if they want to participate in something that is illegal.
Happy Clinic Denver offers everyday low prices on original Botox Cosmetic at $8/unit for all first time New Patients. We are the number 1 clinic listed on the botoxcosmetic.com website, meaning that Happy Clinic Denver buys more original Botox Cosmetic from Allergan USA than any other clinic in Denver. Our injectors are either Dr. Phil Hong Nguyen, MD himself or one of his professional staff that was trained personally by Dr. Nguyen. Dr. Nguyen is always onsite at Happy Clinic Denver, as complications may arise that would need the authority of a physician or a physician assistant to treat with other prescription medications. We keep our prices affordable, to make Botox Cosmetic accessable to everyone, and make it up on the volume that we do. And we promise NEVER to hard sell you on any procedures, and to treat you how we would want to be treated.