Leverage Power:  The Power of Group Buying

One of my business partners and I have been advocating Group Buying (we called it Power Buying or Volume Discount) for several years.  We thought that the tens of thousands of Black Hair Salon owners throughout the U.S.  might be able to leverage their collective strength in numbers to get more favorable pricing for products that they frequently use.  Surely the volume of products that this group could purchase would create a purchasing block to be reckoned with, despite very tight controls on distribution of many of the Black hair related products.

Like every new idea, the devil is in the details.  However, I am more convinced than ever that the move to Group Buying by this sector (Black Hair Salon owners) will happen, sooner rather than later.  Economics and viability demand it.

The practice of group buying has already taken hold, and is the idea behind a new breed of “group buying” Web sites — at least one of which may be valued at more than $1 billion, according to an article in CNN Tech. This article, written in April 2010, predicted that group buying would become one of the biggest Web trends of 2010, and that the market leader will be one of the most closely-watched sites of the year. The leading contender in this arena was Groupon, The bet was that Groupon was set to be the Web’s next breakout hit. The engine that is credited for this accomplishment: the Internet and Social Media.

Fast forward to February of this year, when Dream Glow Social Media posted its 2010 Digital Year in Review. It stated that 2010 was the year of the group buying sites like Groupon. Groupon.com attracted 10.7 million unique visitors in December, up 712 percent versus year ago; other sources put that number as high as 15.6 million uniques.

While the model that we advocate for the Black Hair Project is driven by volume instead of advertising, we can certainly see the possibilities in the Groupon model. Volume purchasing can leverage the power of numbers of people across a broad geographic landscape to get pricing that is otherwise impossible to attain.    Every dollar saved can be used to invest in the business, which benefits the business and could generate new jobs in the community.  Or, the savings could be used however the person chooses.  Either way, all who participate win.

Leverage Power. Yeah! Group Buying.