What happens when a group buying site disappears? The demise of SoSharp
Tuesday, September 4, 2012/
What happens when a group buying site completely disappears from the internet without a trace?
This is the question SmartCompany has been investigating over the past few days, ever since the website of deals site SoSharp completely vanished – leaving merchants and customers hanging.
Both groups have contacted our office by phone and through comments on the SmartCompany website over the past week, furious at being left in the dark without refunds, or with orders and vouchers left unredeemed.
SoSharp’s website has stopped working. Customer service won’t answer the phone. Emails are being left unanswered.
What happened to SoSharp?
As it turns out, the answer isn’t so clear.
SmartCompany has spoken with suppliers and SoSharp chief executive Daniel McDonald to find out what happened to the deals site, and where customers and merchants stand.
The deal site’s problems stem from July, when it offered a deal for a KitchenAid mixer. Hundreds of people signed up hoping to save hundreds of dollars.
But McDonald discovered the mixer was faulty, and announced a refund – worth nearly $300,000.
He says this played a major part in the company’s demise. “It was no longer sustainable going forward,” he says.
An initial decision was made to wind up the company.
Although the details of SoSharp’s finances are still unknown, it is believed the company turned over more than $1 million a year.
But customers were dumbfounded when in August, the website went dark. No customer or merchant received as much as an email. Some are owed thousands of dollars. Others haven’t received products they’ve paid money for.
McDonald has now confirmed to SmartCompany the business has been acquired.
But he offers no excuse for why customers and merchants have not been updated.
“The company has been acquired,” Daniel McDonald told SmartCompany yesterday. He would not confirm which business has acquired SoSharp, or any individuals involved.
However, SmartCompany understands SoSharp approached at least one group buying company seeking to be purchased.
“There is a communication going out today to the customer base, and the advice I’ve received is that customer and merchant matters will be getting dealt with this week.”
It is unknown at this point whether SoSharp customers have received that correspondence.
Customers and merchants became irate when they noticed the SoSharp website was taken offline.
Cosmetics supplier Joe Rossetti told SmartCompany he’s owed about $3,000 and still has 120 orders to send out – but can’t because SoSharp cannot confirm he will be paid for the redemption of vouchers sold through the site.
“They only informed me that they had become insolvent after I had sent out around $1,000 extra worth of stock. I am only a university student and do this on the side, so this is a lot of my savings.”
He then attempted to contact the company for a week with no success, until finally he was told “at this stage everyone was getting paid”.
However, Rossetti has not yet received any payment.
When questioned about payments and refunds to suppliers and merchants, McDonald appeared to have little knowledge of the situation.
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