People love discounts, especially during hard times when money is tight.
This is the way how group buying works: The deal is posted on the collective buying website. Consumers now have a limited amount of time to purchase this deal before it expires. By the end of the deal’s time, “X” amount of people have purchased the deal, and then comes the split with the group buying platform that ran the deal. In the other words, the company using group buying must divide their prices into two parts: the first part is like the gross revenue they’re given when their goods are bought, and the second part is for the website or the organization that runs the group buying system as the fees of using their services.
November 2008, groupon.com was the very first offering this kind of dealing goods. It is so famous these days that people use group on as a verb, like google. And now, there are hundreds of sites offering unbeatable deals.
The company is rumored to have generated $760 million in revenue for 2010, up from $33 million in 2009.
Google famously offered to buy the site for $6 billion but got rejected
PRO ( GOOD ASPECTS)
There are definitely pros to participating in a group buying deal, but many business owners are failing to look at the cons, and ending up with negative thoughts:
It attracts a lot of consumers. You can reach new customers by appealing to those who are looking for inexpensive deals and a chance to save money. You get to charge lower prices to new customers who aren't willing to pay more. Existing customers are willing to pay full price for products or services. Moreover,p eople are going to tell their friends about the experience. If a business gives 100s of people a good or bad customer experience, these same people will then tell their 100s of friends and very quickly you have created a viral word of mouth that could be good or bad depending.
It advertises your business. A Groupon promotion can be a way... [continues]
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