Why Group Buying Works: Macro-economics 101… don’t fall asleep just yet.
Philly Deals
Believe it or not, we get asked often why “group buying” is such a good thing. I mean, how can everyone win? (“That is your claim, isn’t it, O DailyDealTime?”)
Yep, that’s our claim. (That and “Buy American”… “Save the Parakeets”… and “Don’t swim for at least an hour after eating.”) Here’s the thing: Group Buying has brought economics (don’t yawn yet; hang with me here) into the 21st century. See, it used to be: You have a product. It costs you “$ x.xx” to produce it. You must charge more than that cost in order to make a profit. You have a limited supply (you can’t make 4000 bead bracelets in a day, after all), and you hope demand exceeds supply. Then, no matter how many you make, you will sell them all, and you can even raise the price (due to demand) to make it even more worth your while.
This is why Charlie Sheen still has a job. (Does he still have a job? I can’t keep track.) And no, I really can’t tell you the difference between Macro-economics and Micro-economics. Can you? That’s what the “Comments” section is for. Okay. So, supply and demand, and the cost of production. There’s a grid I won’t bore you with that shows how that all lines up. Traditionally, if you want to sell more, you lower the price, and hope it doesn’t undercut your cost of production. You can raise the price, sell fewer items, and charge more for each one. But that only works if you have a high-end product, which takes a long time (and a lot of production cost) to produce.
Forget it: Let’s go to the mall, Girls! Specifically my kiosk, where I sell amazing one-of-a-kind trinkets. I am the only supplier of these trinkets. They take a day to make, each. So I need a day’s pay for each one. Call it 100 bucks, give or take. I’m selling them for $150.00 each. If you buy two, I can give you a break: $125.00 a piece, since I will make the $50.00 profit that way. (I work a day, I earn my hundred. Plus $50.00 for each item. If you buy two, I still make my $100.00 for the day, plus $50.00 profit over two days. See? It works. And I’m okay with that. Fact is, I just want to buy my girlfriend a $50.00 bouquet of roses this week. One day, two days, I don’t really care. It’s all good.)
But you only want one, you say. Now I’m sad. Grumpy even. (And you wouldn’t like me grumpy.) But, let’s say ten of your twenty trinket-loving, dweeb friends want one, too—i.e., you “convince” them they do. And let’s say I won’t sell you my extraordinarily fantabulous trinket for $110.00 unless ten other people buy it too. Okay, so you recruit ten friends. You all want it. You all get it for the amazing low price of $110.00, and I walk away with $110.00 profit. (Please don’t examine or attempt to correct my math; I’m busy making trinkets and buying my girlfriend heart-melting flowers.) It’s kind of like Walmart telling their suppliers, “We’ll take (and we’ll sell!) 1,000,000 units of your product, in a month, but only if you give them to us for 10% profit instead of 25% or 50% profit.
You bet I’ll do that!
And it’s also a little different: I’m local. This is “Our Town,” and I’m a vendor who would like to think I’m offering you (and your trinket-loving dweeb friends, don’t forget) some of the best our town has to offer. You agree. You tell your friends—and I’ll never call them “dweebs” again. Promise.
I have eleven new customers. I couldn’t be happier. In fact, I’m all a-tingle at the thought. Now add to all that this: When a business posts an unbeatable (40%-90% off) deal with DailyDealTime, our town is jazzed: The best, for less. And we’re betting you come back for more.
Did you know that on average a successful buyer of a DailyDealTime daily deal spends 60% more than the cost of the daily deal coupon? You still saved a load of cash. The business still made more clear profit. And, ideally, gave you not only excellent service but the opportunity to try something totally new. (Gents, are you listening? Ladies love “new” and different. Re-think “dinner and a movie,” Dude Try dinner at that trendy East-town place and a tour of the local sites via horse-drawn carriage. You know what I’m talking about.) Point is…
Even knowing that, in the past you had to shell out major dinero. With DailyDealTime, you get the Dream Date on a thin dime. Girlfriends, get your Bad-Girl Crew together and enjoy Girls’ Day Out at half-price. The hot-stone masseuse, the cucumber facial artiste, whoever the vendor—whether or not they’re hip to macro-economics—thanks you. And your BFF’s thank you, too. Guys, do your Boys’ Night Out with a handful of coupons ensuring a great time, a positive balance in your checking account, and maybe even an “I love ya’, Man!” from your homeys.
Bottom line: Social Media Marketing is magic. Truth! It breaks the rules of 19th century economics (because of the way Group Buying ensures a minimum profit margin for merchants while also giving the chosen few [i.e., subscribers to DailyDealTime] an unbeatable deal) and—Super-Friends, unite!—saves the world, literally, by boosting the economy, preserving your pocket money, and promoting local business.
What a country!
Okay, wake up now. The economics lesson is over. Just tell your social network friends: “What a country!” And share the DailyDealTime deals. Capisce?
About the Author
About Author:
Tell others about
this page:
Comments? Questions? Email Here