Group buying is also known as collective buying, and is the opportunity for you to purchase items at a reduced price, because you are part of a guaranteed group of buyers. Group buying is not a new idea, but group buying websites are a relatively recent addition to the system. Group buying websites typically offer deals of the day once a certain number of people have registered to buy the product, and users can then print off the voucher to claim their discount. Group buying websites will typically negotiate deals directly with local merchants and retailers.
As a result, your business can use these following tips to take advantage of group buying websites to increase your exposure and diversify your clients.
There is no doubt that the Internet is an important tool for growing your business, but there is much more to Internet marketing than just having a website for your business. Group buying websites directly connect you to buyers who are looking for something new and interesting, and they have money to spend. Buyers on group buying websites are also shopping for gifts for friends and family so you have great opportunity for appealing to a wide variety of customers.
To use a group buying site you:
1. Design a deal or special offer to be listed on the group buying website.
2. Have customers coming to you to sign up for your deal.
3. Potential customers told about your deal through notification emails.
4. Expand the reach of your business and have happy customers coming back for repeat business.
5. Pay the group buying site a commission from successful sales.
How to Choose a Group Buying Site
Before you choose a group buying site make sure that your business is prepared for the sudden exposure and explosion in business. If you are offering a great deal and you have more people than expected taking advantage of the deal, your business could actually lose money. Therefore, before you advertise with a group buying site, find out about the past experiences of other businesses who have used the site, and ask about any conditions or limitations you can set on your offer.
You then need to make sure you choose a group buying site which will suit your business. For example, group buying sites are particularly suited to businesses who have excess inventory which they need to get rid of, or if they are offering a service and have fixed overheads. In these instances you won’t be losing money because it will cost you more to store the excess stock than to sell it off cheaply, and if you have fixed overheads you can plan and budget for the implementation of your deal.
Benefits of Group Buying Sites
- Typically discounting in business is considered a poor practice, and you should instead always look to value add, rather than cut prices to stimulate sales. However, you need to look at group buying sites as a way to reach and attract new customers, rather than looking at how much you are discounting your product. Group buying sites offer many more benefits than the initial influx of customers in response to your offer, such as:
- Return customers. If the customers who take up your special offer are happy with their experience then they are likely to return and pay full price next time.
- Word of mouth. When your new customers have a great experience at your business they are going to be telling everyone about it, and word of mouth is the most valuable type of advertising.
- Value add. Once you have the customers in your store taking advantage of your special offer, you have the opportunity to value add. For example, if you have offered a discounted massage, when your new customers come in to claim their offer you can show them your range of moisturisers or essential oils.
- Passive engagement. Social media marketing has allowed consumers to be more passive in the way they engage with their service providers. Where a flyer in the mail or an email newsletter was once an effective form of advertising, consumers now want to be able to pick and choose what they look at and consider, and so are becoming harder to reach. However, the types of people who use group buying sites are those notoriously hard to reach consumers in the 18-34 age bracket, are women, are well educated and have disposable income to spend.
- Good return on investment. For the small amount your discount your product or service to be part of a group buying site, you will be getting all of these benefits and more back, which, when you compare the cost to TV, radio or Yellow Pages advertising is minimal.
