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Defending social buying platform business model

December 7, 2011

“A good plan today is better than a perfect plan tomorrow.” – this is one of the famous quotes of Conrad Connie in the movie Wag the Dog. This movie according to me is a classic – it clearly depicts what the media industry is capable of creating or breaking. I would highly recommend any budding entrepreneur to watch this movie as one can learn how to play the media and benefit out of it.

I recently attended a party at one of my friend’s place and I was generally discussing with a bunch of  his friends. We were generally talking about economy and out of a sudden a gentleman started talking about “viability” of the social buying model. I was intrigued and wanted to probe him further and asked him the reason behind this statement – upon which he told me that he had been reading many reviews about Groupon and how vendors are getting ripped off etc. Upon further questioning he said that his first hand information is through the various reports and he has not talked to any vendors. At that point I told him about what I do and whatever he had been reading about Groupon is more company specific rather than the model (in one of my blog posts I talked about the evolution of Coupon model and time will tell about how this model would finally evolve). I then explained to him about how the model can be considered to be an alternate to traditional advertising and how vendors can be benefited by this model.

After sometime he started talking about how he went to a local mexican place (Ole in Copell) and how the food was great etc. When I probed further he said that he got a Groupon and that is the reason he went with his friends and he liked the food etc. I then told him that this validates the social buying model itself and the beauty is that it brings customers to the table, but now the debatable part is whether charging the vendor 50% commission is sustainable or not.
One of the things that DesiSauda is experimenting with is the option of getting into high end purchases like cars and air tickets – much more involved purchases and a longer purchasing cycle.
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