Friday 2 March 2012

Groupon doesn't always take a 50% cut - the economics of suit tailoring

So I picked up my first tailor-made suit today. Normally I wouldn't splash out on something like that, working in technology where I almost never have to actually wear a suit. But I got it last year via Groupon and the temptation of getting one for £495 down from £1200 was too high.

So the shop owner and I got talking about Groupon and he told me that in his case, he didn't have to hand over a 50% cut as usual. For bigger-ticket items, Groupon tends to take a smaller cut. He didn't share how big it actually was. But he said that he made sure to make a small profit on every suit.
That got me thinking about a tailor's profit margins.