If you happen to live under a rock or without internet connectivity then you may not know that group buying is the latest marketing craze to sweep cybersphere — and it's very likely it can deliver you some unbelievably thrifty holidays deals this summer writes Rosalind Scutt.
What is group buying and how does it work?
Companies (from very large to very small) offer up ridiculously cheap deals for a specified time only (usually just a few days). Once a certain number are sold (let's say 20), the deal is activated. All you need do then is redeem your deal by contacting the seller within the time frame specified in the terms and conditions.
Why do sellers engage at such a low price?
The strategy behind group buying is simple: sellers have instant access to a huge marketing database via the deal distributors (Cudo, Living Social for example). This effectively means that sellers can piggyback on the massive databases of the distributors targeting consumers they previously had no way of reaching — while also avoiding huge advertising and marketing fees (the seller will pay a small fee for each deal sold — probably as a commission).
Do sellers make a profit?
Sellers may not make any profit at all — or they may make a small profit (times that by by thousands of sales).
When sellers run a deal at a loss, no profit, or small profit, they do so as a strategic marketing exercise (it is a conscious strategy to raise awareness of their product or service) Ultimately, sellers hope for your repeat business at some time in the future, under a better price.
What kind of holiday deals can I expect to see?
There are plenty of holiday deals on offer via group buying sites. Some of the most common include cheap stays in top hotels and reports in foreign countries (such as Fiji or Thailand), or bargain priced stays in hotels and apartments within Australia (accommodation deals do not usually include air tickets but since accommodation can be a significant part of the expense of a holiday, group buying for accommodation can be the difference between staying home or flying off to foreign lands).
Some examples of holidays recently live are:
Five nights at a five-star hotel in Las Vegas: $615 for $1900 value
Five nights of luxury at the five-star Planet Hollywood Resort and Casino for two plus limousine transfer and tour discounts. (Spreets)
Seven nights in Phuket with breakfast and massages: $349 for $970 value
Seven nights at a four-star resort on pristine Khao Lak beach, close to Lamlu National Park and just a 50-minute drive to Phuket airport (children welcome with an extra nightly fee of $10). (Groupon)
Seven-night family Bali escape: $199 for $800 value
Just $199 for seven luxurious nights at the stunning Medewi Bay Retreat for two adults and two kids! Stay in a spacious retreat villa with tons of local attractions nearby! Explore the famous Medewi surf beach and cascading waterfalls and hot springs and lots more! (Scoopon)
What are the negatives of group buying?
As providers and consumers continue to trial group buying, some issues do occasionally cause problems. The media has covered example of sellers who may have sold deals and then closed shop, leaving good-willed buyers out of a deal. Other examples of negative experiences include customer dissatisfaction (often due to the seller being so busy follow uptake of their deal that they are not able to service all customers aptly).
What can you do if you are dissatisfied with your group buy?
The first thing you can do is contact the actual provider and make a complaint. If the result is unsatisfactory, contact the distributor (eg Living Social, Cudo etc and lay a complaint). If you paid for a deal which you cannot redeem, contact your credit card and ask them to cancel the payment.
Related links:
- Is shopping for beauty products is overwhelming? For the low down on products that are right for you and a little beauty news via a free digital magazine check out the Beauty Advisor app now! .
- Life is full of amazing moments. Share your own and read about others’ on the Olay Facebook page.
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