Want to bargain together?

This story from the New York Times piqued my interest and has got my pondering the international transferability of a potentially profitable business idea.

The brainchild in question utilises social networking and web-based communities to build consumer bargaining power in negotiating cheap deals with retailers.  Now that in itself is not a particularly new idea, as buying clubs have existing before both online and off.

But this time round the business (here it is a mob called Groupon) focuses on using scale (and thus the promise of considerable bump-ups in customer traffic) to win over smaller scale suppliers of products and, increasingly, services.

This coalition building on both sides of the buy-sell equation helps to shift this intermediated relationship from one of virtual bullying (i.e. “If you all back me, I’ll go and squeeze every last penny out that nasty retailer/supplier by playing them off against their hapless competitors”) to almost an altruistic act of matchmaking and local boosterism (“Let’s all hang out and help out that nice new entrepreneur down the road build up some clientele… but at a group discount”).

In a world of Facebooking, Tweeting and web-based micro-entrepreneurs, how long until someone starts knocking on doors around Melbourne promising such love-ins?

(I eagerly await a comment now telling me of such a start-up).


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2 Responses to “Want to bargain together?”

  1. Steve Sammartino Says:

    I’m not really seeing where the opportunity is…. what would the revenue stream be for the organiser?


  2. Andre Sammartino Says:

    Presumably the revenue comes from the selling organisation (“if we get you 100 customers can we’ll take x% of the total”). Although you could also, down the track, build it around a subscription fee for users…

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