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The Power of Group Buying

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The last year has seen a massive increase around the world in the number of group buying websites. These sites offer a new deal every day to a loyal audience of bargain shoppers. The offer is only made available when a certain number of subscribers agree to make the purchase. For a small business it’s an opportunity to reach new customers, transferring the marketing costs to a lower price that will attract new business.

I’ve never been a big fan of heavy discounting because of the damage it can do to the perceived value of your product or brand. Here though, is a channel that enables you to dump inventory in a way that is conditional on achieving the numbers — good luck explaining this to other retailers if you sell through multiple channels.

These sites only work if they are local to your city. In Australia there are at least seven sites offering group buying — one of them is Scoopon which choice.com.auclaims has the biggest subscriber base of any of the sites. I talk to Jon Beros, who heads up Scoopon, about the site, the industry and what sort of offers they are looking for.

First published on CBS News

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