Cupcake calamity: Website discount deal leaves baker swamped by orders for 102,000 cakes and wipes out her profits

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After 25 years in the baking business, Rachel Brown knew her exquisitely decorated cupcakes were popular. She just didnt realise how popular.

So when she decided to drum up a little extra trade with a discount deal, she bit off more than she could chew.

Swamped by orders, Mrs Brown, who normally makes 100 cupcakes a month, found herself having to bake an astonishing 102,000.

Recipe for disaster: Rachel Brown had to draft in 25 staff as demand surged for her cupcakes

And disastrously, because her deal had been so generous and the demand so huge, she made a loss on every order wiping out her profits for the entire year.

The cupcake catastrophe started when the 50-year-old cook posted a deal on money-saving website Groupon.

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She offered subscribers to the site a 75 per cent discount on 12 cakes selling them for 6.50 instead of the usual 26.

Mrs Brown, from Woodley, near Reading, said: We only expected to get a few hundred orders out of it but we had thousands and thousands pouring in. We had to cut it off at 8,500 orders.

Her company, called Need a Cake, normally employs eight workers, but it had to bring in 25 agency staff. After spending an extra 12,500 on staff and distribution, she made a loss of 2.50 per order.

Sour taste: Cake maker Rachel Brown outside her company Need A Cake, in Woodley near Reading. She was besieged with more than 8,500 requests after placing a discount deal on money-saving website Groupon

Rising to the occasion: Mrs Brown's staff worked night and day to meet the extraordinary demand

Without doubt, its the worst ever business decision I have made, she said. Its been an absolute nightmare.

U.S.-based Groupon is a deal-a-day website offering coupons to subscribers, giving discount deals on anything from restaurant meals to spa treatments.

It uses collective buying power to achieve lower prices and the deals it offers are available only if a minimum number of people sign up. Companies that offer deals hope to gain new custom or sell extra goods to customers during their visit.

Mrs Browns offer on the website invited customers to construct their ideal cupcake, choosing from sponge flavour, icing and decoration options.

And it certainly proved tempting. MrsBrown said: As soon as we were making, packaging and sending the cakesout we were on to the next order. It was non-stop. We take pride in making cakes of exceptional quality but I had to bring in agency staff on top of my usual staff, who had nowhere nea! r the sa me skills.

I was very worried about standards dropping and hated the thought of letting anybody down.

Even a much larger company would have difficulty coping, but my poor staff were having to slog away at all hours.

One of them even came in at 3am because she couldnt sleep for worry. Ive been running this business for 25 years and I thought I knew what I was doing. We are still workingto make up the lost money and will not be doing this again.

Heather Dickinson, Groupons international communications director, said there was no limit to the number of vouchers that could be sold.

Sinking feeling: Need A Cake, which usually employs eight people, had to take on an extra 25 agency staff to meet demand, and in the process wiped out all the profits for the year

Fallout: One of Mrs Brown's employees Jo Walsby was given the unenviable task of fielding calls from angry cupcake buyers whose orders were taking longer than expected to be fulfilled

Boxed in: Need A Cake usually sells boxes of cupcakes for upwards of 26, meaning a 2.50 loss was made on each of the 6.50 Groupon offers

She said: We approach each business with a tailored, individual approach based on the prior history of similar deals.

She added there had been constant contact with Need a Cake and this was the first time she had heard the company had experienced difficulties.

But Mrs Brown has refuted this claim, saying she has written records of correspondence highlighting the problem.

Meanwhile, a message on her website informs customers the deal is no longer available.

It reads: The Groupon of! fer is n ow closed. We regret that we cannot process any unused vouchers as they have now expired with Groupon.

WHAT IS GROUPON?

Groupon is a 'deal-a-day' website that offers a series of discount offers on a variety of products and services.

The website, at groupon.co.uk, offers a different daily deal such as a meal out, skills class or beauty treatment in participating cities - 36 in Britain so far. If you are attracted by a deal, you click 'buy now' and give your credit card details.

If enough people have committed, the money is taken and you're emailed back a voucher (or Groupon) which you redeem.

The company boasts that its collective buying power means it can offer discount prices while bringing together businesses and consumers.

HOW TO USE IT

The site is easy to navigate and very clearly laid out. On entering the website you pick your nearest city from a scroll-down menu. The offer is described in minute detail and limitations are highlighted. For example a deal of three microdermabrasion facials for 40, real value 165, is in a salon with 'edgy dcor'. Groupon vouchers have to be used within a specified time frame.

BEST DEALS

Beauty treatment offers abound. with treatments and spa days frequently on offer. One treatment that has gained nationwide popularity thanks to Groupon is the 'fish pedicure' (where fish nibble at the hard skin on your feet), which is almost permanently on offer for less than 10. Other decent deals include car valet service for 10 instead of 25, cupcake decorating classes for 29 from 99, photography lessons for 30 down from 150.

DOWNSIDES

Deals aren't always available nationwide and are limited to particular cities, which may not be near you. Groupon has very few offers from big companies or well-known chains and i! s top he avy on beauty treatments.

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