

Hi HN: Building a 'Group Buying' service - elboheme

My friend and I are building a 'we'-commerce platform (http://hopponit.com). We are aware that a couple of very well-funded startups (namely Mercata, funded by Paul Allen, and Mobshop, co-funded by Marc Andreessen) have failed in this area. However, there's plenty of academic research on this topic. Do you believe that a group buying service can be made valuable? If so, I'd love to read your thoughts on 'how'.
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jaekwon
Group buying might be the wrong model.

What if, instead of focusing on products (which might have been mercata's
downfall?), we focus on pooling money for the local community? It's a
fundraiser service, except the service will also take care of several loose
ends.

(1) people bid real money to get something done in their local community (fix
potholes, install solar panels, bring music bands into their local bar,
whatever).

(2) the service builds web tools to help the community discuss options and
reach a consensus about a solution

(3) people can opt out at any time until the proposed solution (reached via
community vote) gets implemented (by contracting out or whatever). This gives
the users the power of choice.

($) the service primarily makes money when fundraising communities can reach a
consensus. There are also infinite possibilities for making deals with meat
world service providers (construction contractors etc) at a large scale. Also,
the money that users pledge will actually be deducted from their accounts and
held, accruing interest, until the user opts out or a solution is reached.

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Travis
A friend of mine is part of the team at groupon.com, which is a great group
buying site. They've been extremely successful because they've managed to know
and target their prime demograpic perfectly. Also, they localize their deals
to a city, so that you're buying things like teeth whitening sessions and
dinners at fondue restaurants.

But the key to their success has been their customer / market validation, and
the singleminded pursuit of their target demographic (which is itself
interesting, as they're targeting 25-40 y.o. females in a high socioeconomic
class).

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byoung2
If you can get the price significantly below the lowest price people can find
online, and it's not too inconvenient to use your site, then yes you can have
a successful group buying service. I'm not sure how feasible that is, because
the things people are most likely to buy online in a group are electronics,
computers, phones, etc., and the margins are already so thin you'll have
trouble beating buy.com, newegg, and amazon.

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adrianwaj
Check out this model: <http://bit.ly/Lw6Id>

