A group buying guide for businesses in South Africa

Group buying in South Africa is reaching a mature level in record time. There are now many group buying websites, all offering a good marketing and customer acquisition service. A good number of them will drop out of the running later in 2011, and the remaining players will form a properly structured industry.
Customers are getting much more savvy as to how group buying works, and are enjoying the experience, if not for a bit of “deal fatigue” when receiving too many offers from certain or many websites.
However, what about businesses – are they reaping the promotional benefits from the group buying campaigns they offer? Are they happy with the group buying experience from a long-term financial point of view, as well as being a client?
Indeed, there are some group buying websites in South Africa and abroad that do not offer optimal service or results, and some that deal superbly with businesses whatever the result. The wrong ones can be avoided by making the following checks when approaching or being called by a group buying company.
Here are some things to look out for:
1. Reference checks
If you employ someone, you take a reference on them to be sure they do good work. Similarly, you’re employing a group buying website to do a job for you. You don’t even need to tell anyone you are going to phone. All group buying sites have a section for “past deals” – click through and select a deal, preferably in your industry. Then call them and ask how the campaign went. The numbers sold are not always an indication of a good deal for all involved.
2. Get paid fairly!
A hotly contended issue on the internet currently, both in South African group buying circles and overseas. Group buying companies make their bucks by taking a portion of the income generated by the deal. So, a coupon sold for R100 will be split as per the group buying site’s fee, sometimes as high as 50%. This means that as a business, you’re entitled to R50, but it doesn’t mean you’ll get paid straight after the deal. Check what the payment method is, and negotiate or turn them down if they do not pay you at least something upfront.
Important to note, some sites only pay you on redemption, meaning that once customers redeem the coupons at your business, you have to show these to get your money. Avoid this like the plague – if a customer doesn’t redeem, you won’t get a cent and the group buying site keeps the full price. Also, you may need some of the money upfront to prepare for the influx of customers.
3. Buy a coupon
Get on the site you want to go with and buy something for yourself or a friend. This small investment will get you to understand their payment process and also how easy or difficult it is to navigate and use the website. Group buying is meant to be an easy e-commerce transaction, and if you get stuck, that can hamper the deal you are offering. Should anything go wrong, call their hotline and see how their support handles the call. Now try that number after hours to really test them.
One last point to mention, is that when running a deal, you need to prepare your business accordingly. Tell your staff about it and get them ready to accept coupons and entice shoppers to spend more or learn more while on your turf.
Group buying is a wonderful method of bringing new traffic into your business, whether online or to your actual store. With the proper due diligence, you can set up a deal with the right group buying website and reap huge benefits from unparalleled exposure and marketing online, as well as up-selling the many fresh customers you see on your premises.