Group Purchasing: Another Good Reason to Get Together!

BY IN Uncategorized, 18.03.2011

One of the latest trends in Web commerce is Group shopping. In short, it’s a way to use the Web to get a volume discount: Several people – sometimes friends, but possibly strangers connected over the Internet – agree to approach a vendor of a specific product in order to haggle with the proprietor as a group in order to get discounts. The entire group agrees to purchase the same item. The shoppers benefit by paying less, and the business benefits by selling multiple items at once.

In theory, group shopping process is simple:

- You start a group dedicated to specific product and set a target price;

- Alert your network and encourage them to add in to your group. The more people join, the lower the final price;

- The group closes and the vendors bid on the sale; the lowest bid wins. The group is happy because they’ve just gotten a substantial discount and the vendor is happy because they’ve just sold a lot of product.

The group buy phenomenon has been most successful in mainland China, better known there as Tuángòu. Although initially a Chinese concept, recent developments led to a wide increase of appearances of similar phenomena in Europe and North America.

While the original Tuángòu strategy was self organized and executed, most of the group buying in this part of the world is done through online intermediaries. As a rule, interested buyers are asked for credit card details, which will be charged only when a required number of buyers registers. Group discounts hit the Web in 2008 with Groupon project appearance and have gained mass appreciation during the following years. As of October 2010, Groupon serves more than 150 markets in North America and 100 markets in Europe, Asia and South America and has amassed 35 million registered users.

Group purchasing is a common practice in the grocery industry, health care, electronics, industrial manufacturing etc. Nowadays, we witness the appearance of Buying Groups – small, independently run businesses combining their purchasing power to negotiate better discounts traditionally only available to major enterprises. By participating in a Buying Group, businesses can theoretically save on purchasing costs by ‘outsourcing’ their purchasing capabilities to a Buying Group.

On the 7th of March, 2011, the first web templates shop to ever use the group discounts system on a constant basis TemplateNinjas.com was launched. The main concept is that each buyer, who takes part in a deal, saves 30-50% of the common web template cost, providing that the required number of web templates is purchased in terms agreed. The web templates offered by TemplateNinjas.com are products of the biggest web templates providers TemplateMonster.com, the premium collection of which encounters more than 20 000 items. This is especially interesting to the variety of design studios, freelance developers or small business owners!

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