Group buying became popular for the benefit of both the business and the consumer.
Advantages to the consumer:
• Purchase items at a lower price.
The main advantage of group buying is that the consumer can purchase products at a lower price. The consumer could use their money on other stuff instead.
• Get to meet new people and acquire new friends.
Since it requires a lot of consumers to work together in order to gain a discount, they can acquire new friends. They can also meet new people who share the same interests as them.
• Convenience.
People at their homes can buy the products that they wanted with only the use of the internet and their gadgets. It doesn’t require them to directly purchase the products themselves.
• Save more money.
People are saving money these days. There are a lot of things we need to buy and a lot of things we want to buy. The lower the price, the bigger they can save.
• Easy payment.
Payments are done online unlike other transactions wherein people need to line up and undergo through a lot of process just to be able to pay. Some websites makes sure that every transaction is secured.
• Vouchers are sent online.
Vouchers can be received faster. Once the transaction has been confirmed, they will automatically send the vouchers to their consumers. Vouchers are very important as it serves as a proof that a transaction has been made.
• Group buying websites and applications are available online.
It’s easy to find these types of websites these days. These sites often compete with one another to prove that they’re one of the greatest websites out there.
Advantages to businesses:
• Sell multiple items at once.
Some businesses can only sell pieces of a certain product while in group buying; you can sell products all at once.
• Attracts a lot of customers.
Many people find low cost products appealing. They usually like to buy items that are on sale for the purpose of saving more money. Attracting more customers means that greater benefits can be seen.
• Cleans your storage.
There are certain products that have less profit resulting to consumers buying other products instead. These products remain in their inventory and storages. This is a great way to remove and lessen this product to create spaces for newer products.
• They can sell their products internationally.
Since there’s a lot of online group buying websites, they cannot only sell locally but also internationally as the products can also be shipped internationally.
• Strengthen customer relationship.
It makes customers not only purchase once. If the company provided good service then the customer would want to make another transaction with them and they can also ask other people to join them.
• Can be a good form of advertisement.
Companies usually implement group buying as a marketing strategy rather than a sales strategy. They used it to garner attention of customers. They focus on selling items at a lower price thus, attracting more consumers. In case a lot of people had knowledge about the company, increased trust and revenue can also be expected. It’s also a way of marketing their brand and widens the range of consumers they can reach.
As there are advantages in this buying strategy, certain disadvantages can also be noticed:
• Business profits may decrease if not launched properly.
The company may also experience loss if it’s not implemented carefully. It is important to close a deal but because of certain circumstances, it might lead to problems.
• Needed to reach the minimum number of buyers.
If the needed minimum number of buyers is not attained, it is not possible to purchase the product. The deal would be disappointed. Thus, the consumer’s time and effort might go to waste.
• Sign-ups needed.
You need to sign-up first for you to have the chance to buy the product. The sign-up is a necessary step.
• Need to wait for several days for the product to arrive.
As the product will be sent, it would take several days to process and send the order.
• Fraud cases increases.
Fraud cannot be avoided when engaging in online shopping. It is better to choose the trusted websites and those websites who received positive reviews from its consumers.
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Buying items for a cheaper price is a great thing. It attracts people into buying them. It’s beneficial to know that there are group buying going on to save more time, money and effort.