How Group Buying Can Help Your Business

Group buying or collective buying is fast gaining popularity among business owners. The idea originally hailed from China where it is known as Tuangou. Online group buying was first introduced through an e-commerce start-up, Mercata, ten years ago and they had dubbed this business plan as “We Commerce”. For those business owners who are still trying to grasp the concept of this phenomenon, let me break it down for you.

Let’s say you are a subscriber to a discount website or a daily deals site as it is more popularly known nowadays. You would see various offers on product discounts on the site and if you are interested, you would just need to enter your payment details and wait until the minimum number of people is reached. Once the deal is confirmed, you will be receiving a voucher on your email. It is simply a shopping strategy in which you get to pay less while the business gets to sell more.

group buying helps your business

However, it’s not just about the savings that we are after. One might think that group buying is well and good for buying products you need to run your business, but it is much more than that. Today, most group buying sites are largely focusing on local businesses and for consumers who are a bit conservative on their spending habits, this trend is just the answer to their prayers.

So how can a small business owner reap the benefits of this phenomenon? The answer is fairly simple. Register to one of the growing number of group buying sites so you could offer discounts and start riding the group buying wave.

You might think that this is counter-productive for your fledgling business. After all, your business should be generating more income and with the current state of the economy, offering discounts is the least of your priorities. But you need to look at the bigger picture. More consumers are looking to find great deals because of the weak economy.

Your business, no matter how lucrative it may seem, is just starting out and you need to have an edge against your competitors. In effect, you should start thinking the way your customers think:  What could you possibly offer that your competitors couldn’t?

The temptation of a great discount is too much to resist which is why group buying is becoming vastly popular worldwide. For startup businesses or even if you are in business longer than you could remember, attracting more customers is a challenge. Offering your products on discounted rates may not make you the millionaire you envisioned yourself to be but it definitely would pave the way.

The group buying trend is a break from traditional forms of advertising your business. Instead of paying upfront for publicity, you offer discounts instead to promote your business. You might just “break even” on the deals you give on those group buying sites but the most important asset participating on those sites can give you is the publicity your business gets. Generating income after that is entirely up to you.


5 Comments How Group Buying Can Help Your Business

  1. Phanio

    Great post – especially the fact, as you mention, that some (many) consumers will make impulse buys simply because they think they are getting a great deal – easy way to boost short term revenue and get your name and products out there.

  2. Craig Langdon

    If you get into group buying – for goodness sake, make sure it’s not just about the publicity, but about capturing someone’s details so that we can market to them again and again.

    Seth Godin says it all in his book “Permission Marketing”

    The ultimate for this type of discounting activity is to get someone on subscription (cheap the first month perhaps?). Then you automatically keep on selling to them.

    Whatever you do, tread with caution…

  3. Alex @

    We spent some time researching the different “group buying” venues, and it seems that it makes the most sense for a business to sell through one if their products are fairly low cost (or very high margin) or subscription/service based. For example, would you ever see a car dealership on one for these sites? Probably not because they’d lose money on each deal.

  4. David Weasley

    Very interesting read. In unstable economic conditions it’s important especially for small businesses to think of what they could offer their customers that their competitors don’t. is a site that offers group deals for small businesses that work both ways. Suppliers can advertise with them and as a small business you can opt for their various group deals.

  5. Nick Mody

    Great article. From my experience, I find that if you can offer a discount every time customer comes to your store they are more likely to be a loyal customer.


Leave a Reply

Your email address will not be published. Required fields are marked *