Small Business in a Big World

October 27, 2010

Enter the Group Buying Trend


[tweetmeme source=”LilBizBigWorld” only_single=false] In recent events, the conclusion of the Small Business Round Table Series brought forth a discussion on different topics relating to small business. One such topic is the growing trend, group buying. According to an article by Erica Swallow, seven small businesses achieved success by using group buying sites. Now since this is a fairly new-ish trend on the web, I figured, I would give you the basics.

Group buying to put it simply is a shopping strategy which when you think about it is pretty literal: a shopping strategy where in businesses form a group to get better deals and discounts for various products and services. How does it work? Simple. Different businesses band together and haggle with the vendor for the wholesale price. The benefit of this is three-fold. Since products and services are purchased at a discounted price, businesses pay less therefore further stretching their cash flow. For the vendor or the proprietor the upside is that multiple items or services are sold in one transaction. As for the consumer, if the item or service is purchased at a wholesale price, then ideally, the retail price would also be discounted. A win-win situation.

Here are some of the leaders in this trend:

  • Groupon
  • MyCityDeal (Groupon’s equivalent in the UK)
  • LivingSocial
  • BuyWithMe
  • Twango
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