Cake shop owner Rachel Brown received 8,500 orders after she offered a deal to customers via Groupon.
Brown said: “Without doubt, it’s the worst business decision I’ve ever made. It‘s been an absolute nightmare.”
Brown, who owns Need A Cake in Woodley, near Reading, Berkshire, made a £2.50 loss on each box, selling the cupcakes for £6.50 instead of their usual price of £26.
Brown, who employs eight staff, had to pay 25 agency workers to come in day and night to produce the cakes.
The cost – an extra £12,500 – wiped out her profits for the year and nearly made her go bust.
Brown said: “We are still working to make up the lost money and will not be doing this again.”
Groupon, a US-based company offers coupons to subscribers, giving discount to goods including restaurant meals, products and spa treatments.
The site doesn’t offer a way to limit the number of vouchers sold.
The company said it was in touch with retailers offering discounts on its site constantly and this was the first it had heard of Brown’s difficulties.