Group Buying Programs
Be careful buying things from Groupon and Smart Bettey.
The email is sent digitally to our inbox. Subject: Your Daily Groupon Deal for Kelowna
Our minds wonder, could be something great we really need. I mean really need. No, seriously, I can’t go another hour without this product.
I don’t know what it is as the subject line of the email doesn’t say, but it’s a deal so I must need the product they, as in Groupon and other group buying services, are trying to get me to buy.
Do you know how group buying sites function? Most don’t know the background. I don’t mean, click on the button, enter your credit card, and open your email to get the product/service. Before one gets in a rush to buy more stuff, I recommend taking a minute to buy more knowledge about how it really works – and this knowledge is coming free!
Let’s say I am John Doe (cliche 101). I own a business and want to use Groupon, or another group buying site, to drive new customers to my business. Groupon has a subscriber list of about 70,000+ for the Okanagan. Wow! I can reach the email inboxes of about 70,000 individuals.
I sign the agreement with Groupon, outlining the 50/50 split of revenue.
In my store I will sell a pair of earrings for $200 (guess, I am a jeweler). On Groupon, this will be sold for $100 (half price). I get half ($50) and Groupon pockets half ($50). The nice thing, Groupon pays the credit card fees.
Here’s where the questions start. A jeweler will likely buy earrings he/she sells for $200 for about $40-75. So, I sell a few earrings and probably break even. However, what happens when I sell a few hundred? With the man power and overhead of processing all these packages, I may end up losing money.
Why I am I selling a $200 set of jewelery for $50 (in my pocket)? Some would say there are two reasons,
- It has a scratch or slight imperfection; and/or
- It is not as high of quality as promised.
Be aware what you purchase. If you buy a $50 gift certificate, this is one thing – not sure how they could rip you off on this, unless they don’t send you the gift certificate. However, be very careful of goods and items you purchase on group buying websites/services.
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Adam Goodwin is changing the world by growing the local #TakeTheActivePledge to a global movement. He is currently Marketing Coordinator for Okanagan Elite Athlete. Along with his start-up one3ag, he is changing the lives of individual children, teen, youth, adults, and older adults with the #TakeTheActivePledge movement. Join him today to help save a generation.