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SpinDistribute.com Article Directory

The following article was published in our article directory on December 15, 2011.
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The Power of Collective Haggling: Online Group Shopping

Article Category: Shopping

Author Name: chickie maxwell

The practice of bargaining, also known as haggling, has been around for centuries. Normally, the process involves two parties: the buyer and the seller. Each party negotiates for the price to be paid for a specific product or service, as well as several terms and conditions of the transaction. After reaching an agreement, each party goes to fulfill each other's part of the bargain. However, this once common alternative to fixed pricing has mostly disappeared in modern times.

As e-commerce technology have become more secure and versatile, the practice of bargaining has been revived and kicked online shopping up a notch with the introduction of group buying. Group buying has its roots from the Chinese practice of Tuangou. It is a shopping strategy wherein a group of people would band together and negotiate the vendor of a particular product. By negotiating as a group, products are sold at a discounted rate. Both parties benefit from the transaction as the merchant was able to sell more items while buyers are able to purchase what they want at a lesser price.

Just imagine this scenario: A popular burger chain is selling its best selling burger meal at $ 2.30 per order. A group buying website offers a 25% off deal on the same item for a discounted rate of $1.70. Members who are interested in the offer will enter their payment details and submit it for processing. Once the set number of paying members is reached, the deal goes through and vouchers are distributed to members who signed up for the offer. Vouchers are then redeemed at the restaurant.

The modern concept of group buying has gained popularity worldwide. As of 2010, there are more than 500 shopping websites geared towards group buying activities. Asian countries are led by China where the trend originated. Through the years other countries have joined the bandwagon with Hong Kong, Malaysia, Philippines, Singapore, and Taiwan setting up local group shopping websites.

In North America and Europe, major players include Groupon, LivingSocial, MyCityDeal, and BuyWithMe. In comparison to the original Chinese concept, Western group shopping websites operate as intermediaries between the buyers (members) and sellers (merchants). Payment is mainly done by credit card. Due to the presence of intermediaries, the payments received by merchants are significantly reduced. Intermediaries are known to charge as much as half of the total deal price as their share of the profit.

Intermediaries usually do business with local restaurants and retail outlets using location-specific coupons. During the recent years national chains have begun to participate such as Nordstrom and Gap. Major web sites have also shown interest in getting a share of the group shopping market. The popular auction site eBay has expressed their plans to launch their own group deal site by the last quarter of 2011. In addition, Google and Facebook have come up with their own plans to join the competition.

Keywords: shopping websites

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