Lets say if you go to an auto shop, they charge you $130 for a wheel alignment. On Groupon, this same business charges $130 but since Groupon has a 30% off coupon, the price is now $70. So do Groupon pay that business for the 30% of that promotion or how does itwork?
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There are 2 basic types of costs for business: fixed cost and transactional cost.
Fixed cost is for things like rent. A restaurant pays for the rent whether anyone is eating there or not. So having additional customers increases revenue without increasing the fixed costs.
Transactional costs are the costs of the product and labor for what you are selling. A restaurant pays for the food it sells. So if you sell a steak you have a higher transactional cost then selling a potato, so you have to sell the steak for more money.
Some things like labor can be fixed or transactional. A restaurant has to have a cook. If an extra customer comes in, you do not have to pay the cook more. So that cost is fixed. But if more people come in and you have to hire an additional cook it can be considered transactional.
A museum only has fixed costs not transactional. So getting more people to go to the museum just increases revenue, it does not increase expenses. Getting someone to pay $10 with groupon is better for the museum than that person not going at all.
A restaurant has fixed and transactional costs. If the restaurant pays $15 for a steak and they sell it for $10 with groupon, they are going to lose money. But if they sell it for $20 with groupon they make a little money.
In most businesses the transactional cost is far less than half the normal price. This is true even of stores selling goods. If they normally sell a shirt for $50, they pay less than half of that for the shirt.
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