The Rebirth of Student Discounts Through Collective Buying

Now here's a website I can get behind. CollegeBudget.com offers MASSIVE discounts of 90-50% off exclusively to college students. I was turned on to this site by a kid who sits next to me in my Humanities class. As luck would have it I was in the market for a protective laptop case/sleeve and right on the site was a deal for laptop cases 63% off. Sadly for you this deal ended at 12 o'clock last night, which is part of the kicker. Each day College Budget lists a handful of deals that go up only for a few days, if not just one. Selling such deeply discounted products requires insuring you sell enough to make some profit. For this reason the deals on CollegeBudget.com have "tipping points" or a certain number of orders required for the sale to happen. This is reminiscent of my previous post about Quirky.com where a certain number of customers must commit to purchasing an invention before it can be sold. These types for deals are known as group buying. The good people at CollegeBudget.com aren't the first to conjure up such an idea.

Group or collective buying was originated in the People's Republic of China. Instead of buying through large mega deal sites like Groupon, collective buying emerged through a handful of individuals approaching online retailers as a group in an attempt to use leverage to haggle for a lower price. The idea has since made its way to America and sites like Groupon and Living Social have been making a killing over the past few years. Two years after starting Groupon in November of 2008 its owners flat out denied an offer from Google for the company for $6 billion dollars. While the deals group buying sites offer excite buyers and allow smaller companies to reach millions of customers, they yield little revenue for the companies that participate. By making such deals available to customers are companies expanding their customer base or just training their customers not to tolerate anything less than 50% off? Only time (and retail price reorder rates of group buying customers) will tell.