» How Group Buying Websites Work
In the last year or so, there’s been a lot of hype surrounding group buying websites, such as Groupon, KGB Deals and Livingsocial. There are now twenty to thirty of this kind of organisation in the UK so it’s quite likely that you’ve heard of at least one of them, or you may even be a member of one.
If you’ve ever seen an advertisement for a group buying website, you’ll have noticed that they offer goods and services at ridiculously low prices. So low in fact, as to arouse suspicion that they may be some sort of scam. Quite often you will see spa treatments or dinners for two at swanky restaurants advertised at (for example) 70-90% off the usual cost.
So, have you ever wondered how group buying works? How can they afford to sell all this stuff at such a low price? It’s actually a very simple concept. Group buying sites offer people collective buying power, which basically means that the site can negotiate top deals with local businesses at enormous discounts because the merchants know in advance how many extra customers they will be getting and are able to accurately calculate how much of a discount they can offer and still make a profit. The businesses are also guaranteed a large influx of customers and a unique way to advertise. Because the deals are such great value, this attracts a lot of new customers, giving rise to the possibility that those customers will be so impressed with the product or service on offer they return again, next time paying full price.
The way group buying sites work also allows business to advertise their products and services to customers who actually want them. More traditional advertising methods such as leaflet drops are not only labour intensive and involve costly printing, but they bombard people with junk mail they possibly don’t even read and the uptake can be poor. With group buying sites, the customer comes to the business, not the other way around.
The idea of group buying is thought to have originated in China, where groups of people (friends, acquaintances or members of online forums) would approach a local merchant with a view to negotiating a cut-price bulk purchase on goods or services. Organised buying groups such as the ones we now know evolved from this. All an individual now has to do to take part in group buying is sign up to one of the many group buying sites around and look for a deal that interests them.
Group buying sites are well worth a look for most people. They offer a wide range of products and services, so there’s something for everyone. Many people who are already members cannot imagine paying full price for anything since joining and have never looked back. Now you know how they work you can be sure it’s not just some elaborate con. Why not sign up today and start saving?