What if you could save money on going out to eat, golfing and even indoor rock climbing by buying in bulk, the same way you already save money on everything from shampoo to cereal by shopping at warehouse stores? Social buying sites allow you to do just that by offering huge percentage discounts on tickets, classes, admission fees and more when a minimum number of people sign up to participate in a deal a business decides to offer.
In Pictures: Debunking 10 Budget Myths
How It Works
Social buying sites are free to customers, though some will ask you to register. Finding the deals couldn't be easier. Just go to one or more of the following websites and see what they have to offer in your area. Some sites will let you right in, others require you to complete a short registration form. Some offer deals in more geographic areas than others.
When you find a deal you want, simply purchase it through the website and you'll receive an electronic voucher that you can print up and take to the business with you.
You don't have to limit yourself to social buying experiences in your area. If you're going on vacation, why not see if you can pick up some deals in the city you'll be visiting? You can use social buying to cut the cost of your vacation or make your budget go further. (People are sometimes skeptical of new trends, but sometimes those trends become permanent fixtures. Find out more in Consumer "Fads" That Haven't Faded.)
What Kinds of Experiences Do Social Buying Sites Offer?
Don't expect to find a deal for 50% off groceries at a social buying website. There are no discounts for necessities (unless you consider facials a necessity).
What you will find are steep discounts on wine tasting, boutique shopping, golf, dry cleaning, personal training, massages, restaurants, personalized paper products, surfing lessons, flamenco shows, bowling, amusement parks, hotel rooms, rock climbing and more. There's no limit to the types of services, products and experiences you'll find on social buying websites.
Social buying sites also offer unusual experiences that you wouldn't have ever thought to try, like a military flight simulation, a gondola cruise, circus arts classes or indoor skydiving, to name a few. (Find out more about new ways that the internet helps you save; read Cheap Tweets: Followorthy Deals On Twitter.)
If you don't live in the heart of a major city (or aren't willing to drive to one), you might not be able to find deals in your area. If you live in a huge metropolis like Los Angeles, the daily deal might be 60 miles away from home - though some sites have found ways around this problem. Groupon, for example, offers daily deals for Los Angeles, the San Gabriel Valley/Inland Empire, Long Beach, Orange County and the San Fernando Valley. In the New York City area, you can focus on deals in New York, Brooklyn or Queens.
Sometimes you may not be able to find a deal that interests you, or you may not be able to snag the deal you want. Some sites only offer one deal a day; others offer several. And deals are generally dependent on a certain number of people signing up and won't go through if the minimum isn't met. Also, deals will sometimes sell out, and many are only available for 24 hours at most, which means you might feel pressured to buy quickly (and regret your decision later) or miss out on a deal you wanted that ends up selling out or that you forget about. And once you've purchased a deal, that's it - you won't be able to "return" it and get your money back, so make sure to read the details of a deal before you purchase it.
Finally, some "deals" are still quite pricey. Do you consider a $170 facial discounted to $89 to be a great deal? If not, some social buying deals are going to disappoint you.
Benefits for Businesses
If you're a business owner, you can use social buying websites to attract new customers. Even if you attract a fair number of customers who can't afford to frequent your business on a regular basis, if they have a good experience with you, they are likely to refer you to friends and family and perhaps come back on special occasions or when they're able to spend more. In some cases, once you have customers in the door, you may be able to make the experience more profitable by upselling - but don't be pushy.
Don't forget to tell your existing customers about the deal you're offering - they'll appreciate it! Email, Facebook and Twitter are all effective, low-cost ways to notify them.
Unlike traditional advertising, social buying can be extremely cost effective. It makes it easy for businesses to track how many deals they've sold, as well as how many customers followed up and took advantage of the deal. The risk of spending money on advertising is also lower. Groupon, for example, charges nothing for you to post a deal - it makes money by collecting a percentage of the price of each Groupon purchased, so you only pay for the advertising that actually attracts customers. (Learn more about what it takes to run your own business, read Business Startup Costs: It's In The Details.)
If you've wanted to get out and try something new but think you can't afford it, consider social buying. Even if you're living comfortably, social buying can help your entertainment budget go further, compel you to try something new, make gift giving less expensive or allow you to give nicer gifts than usual. With only one or two deals a day on most sites, you may have to wait awhile before an appealing opportunity comes along. But the steep percentage discounts these sites offer are unbeatable.
Catch up on the latest financial news; read Water Cooler Finance: Shocking Court Rulings, Sinking Markets.
ProfessionalsSocial media is a great way for financial advisors to build a brand and potentially generate leads if it’s properly used. Here are some tips.
Stock AnalysisFind out which risks are most important to Amazon's shareholders. Learn which operational risks impact share prices and which financial risks affect investors.
Stock AnalysisLearn how social media continues to shape the way political campaigns are run. Through social networks, candidates can reach voters directly like never before.
Stock AnalysisLearn how Jet.com is taking on retail giants Amazon, Walmart and Costco by promising to save customers an average of 10 to 15% on over 10 million items.
Investing NewsInvestor hopes for a fresh start to the world economy in this quarter may be misplaced.
EntrepreneurshipFind out how people are making money online on Twitter, and get some ideas that can turn Twitter into a source of revenue for you or for your small business.
Stock AnalysisLearn how the startup Casper is delivering a good night's sleep directly to customers' homes for a fraction of the cost of the competition.
Personal FinanceTextbooks are so expensive. What are the tricks to find cheaper books?
Personal FinanceHere are some core reasons that the traditional retail industry is struggling today
Personal FinanceLearn how Facebook users can send and receive money within their social network, and understand how the site benefits financially from offering this service.
Electronic retail is one of the fastest growing segments of the economy. Every year, more people are choosing to purchase ... Read Full Answer >>
The United States and China are the world's largest and second-largest retail markets, respectively, by total retail sales. ... Read Full Answer >>
Electronic retailing has changed the consumer discretionary goods sector by increasing price transparency and product information. ... Read Full Answer >>
Stock evaluations of electronic retailers differ from brick-and-mortar businesses in that e-tailers have higher growth rates. ... Read Full Answer >>
Nordstrom (JWN) is a high-end retail sales department store offering fashion, shoes and accessories for men, women and children. ... Read Full Answer >>
Economic conditions such as interest rates, unemployment and wage growth drive share prices in the Internet sector. This ... Read Full Answer >>