This morning I read an article by Pete Cashmore of Mashable about group buying.  I’m sure that most of you have seen advertisements where something can be purchased at a really great price if a certain number of people commit to buying it.  If the specified number of sales is not reached, the deal is off.

This is a great way for individuals to get good deals on products.  It’s also an excellent marketing tool for businesses.   (We’ll talk about the marketing side of this in another post.)

For this post, one of the big factors at play here is that the more product a business buys, the cheaper they are able to buy it.  We all know that this is why chain stores are able to sell at lower prices than small independent stores.  Price is by no means everything, but it doesn’t hurt.

What if, however, a group of small businesses got together to purchase in larger quantities?  Wouldn’t they be able to purchase at better prices?  Wouldn’t they then either be able to offer better prices to their customers or increase their profit margin?  Or, maybe a little of both.

What would it take to accomplish this?  It would take a group of businesses working together for the betterment of all of them.  Some might say that this won’t work.  To that I have to say why not?  Who wouldn’t want to work with a group of business people that are all interested in the same thing – the success their business.

I ask you to think about this concept.  It can be taken much farther than just buying power.  Not that buying power is a small thing but if you think about it, it could be so much more.

We’ll talk more on this in future posts.  For now though, what are your thoughts?  Is this something that you feel could work?

Photo credit:  didimkaem

It has long been thought that the way to go about marketing your business is on your own.  That a competitor should never be mentioned to a potential customer for fear that they will become a customer of your competitor rather than you.  Each business being like an island on which no other businesses exist.

Obviously, marketing this way works or it wouldn’t be done.  The effort and the expense is all yours and the results are all yours, good or bad.  As we all know, advertising is very expensive and having a campaign that doesn’t produce good results is extremely expensive.

For the sake of argument, lets say your business is on a block that has 10 stores on it.  These businesses could be all antique shops or restaurants or whatever.  Some would believe that one or two of these shops going out of business is a good thing for the businesses that remain.  That the customers that would have went to the one or two that went out of business would then become customers of the remaining businesses.  I, on the other hand, would have to argue against that.  In my opinion, if one or two businesses on the block are closed, not only do their customers  go elsewhere but so do others.  The perception of the block with closed businesses is that of a declining area, one in which people are less likely to spend their time and money.

Now, let’s think in terms of that same block being a community.  The 10 businesses working together for the betterment of all the businesses, of the community.  Those 10 businesses are now sharing the expense and  effort of marketing and advertising.  Now advertising becomes much more affordable and with 10 people working together, bouncing ideas off of each other, also becomes more creative.  The best part is that once customers begin to feel the synergy on the block, they will come to trust and be extremely loyal to the community.  This then changes the perception of the area and attracts more customers to your community.

What are your thoughts on this?  Do you agree or disagree with my line of thinking?  Share your comments below.  Let’s get a conversation going.

Photo credit:  Edgar Barany