Have you logged on to an online stoe and see that the shops are offering prices at 50 to 70% discount? They all sound too good to be true right? Well, as a matter of fact, they actually are.
What’s it all about? This is a new trend of online business strategy that takes advantage of bulk buying. This strategy was actually popularized by china where buyers group together in order to have bargaining leverage.
This results to a Win-Win situation where buyers are happy since they get the merchandise at a cheaper price and the seller is happy because he gets to sell a lot at one time.
Groupon was the first one to implement this strategy online since 2008. Because of its supposed effectiveness, a lot of major players have decided to join in like Livingsocial, Tippr, etc.
Now, if you’re a service provider (or perhaps a seller), this can be a great venue for you to increase your sales.
“How will it increase my sales when I’m lowering my prices?”
The Real Purpose
Well, the truth of the matter is, this initial exposure of providing massive discounts is only the first step. The purpose of availing of this is to let consumers know of your products. With prices dropping as low as 30% of the initial cost, you can only expect buyers to rush in. Some suppliers will even go lower than that just to make sure they are totally visible in the market.
As I’ve said before, this is only the first step. The next thing that you have to guarantee is customer satisfaction. A lot of customers are willing to come back around as full-paying customers especially if they figured out that your products are worth it.
Remember, that in order for this to be effective, you’ll need to have a quality product or service being offered. Otherwise, you’ll just be concentrating on dropping your prices. This is a losing formula.
There’s Always Room For improvement.
In order to offset your chances of having more customers, especially returning customers, make use of customer reviews. Aside from positive feedback driving more and more customers in, the negative feedback allows you to improve and possibly reinvent your products and services in order to make it better.
In short, Group buying gets you customers. Customer Reviews are for you to continuously improve.