Thursday, August 18, 2011

Economies of Scale : Groupon

When anything is bought in bulk, the price is naturally cheaper. This is because the costs associated with the product is spread within the large quantity. 

This is what the website Groupon or Scoopon(Australia) has done. They have negotiated with any producer to sell their products through the groupon/scoopon website at a discount because there is quantity in the purchase. The only catch to these websites is if the minimum quantity is not purchased. Then the money would be returned to the consumers.

This is a great business idea as it is helping others get a cheaper price and getting a small cut out of it.