Group-Buying Sites Bundle Shoppers for Big Discounts

They promise stores business, and pass on the savings
By Harry Kimball,  Newser Staff
Posted Mar 24, 2010 10:31 AM CDT
The Groupon site.   (

(Newser) – Your mom may have told you not to follow the crowd, but to get some of the web's deepest discounts, you'll need to do exactly that: "Welcome to the world of group buying," writes Katherine Boehret, "where the power of the Web can be utilized to offer surprisingly large discounts to a sizable number of people for things they actually want to buy." Websites like Groupon and LivingSocial bargain with local business, offering the patronage of their membership in turn for a markdown. Then they take a cut, but still usually pass on at least a 50% savings to you.

The sites also offer incentives for bringing in new members or increasing the size of the pool on a particular offer. Boehret describes a recent transaction in the Wall Street Journal: She joined a pool of more than 2,000 people and bought a haircut for half price. But she also urged two friends to sign up and buy the deal, netting her $20 in credit, which she used to buy $40 in food and drink at a local restaurant. Sweet deal.

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