An SEO group buy is a way to hire out your business or to increase the revenue from your website, without having to fork out an enormous amount of money upfront. This kind of operation is also often referred to as a drop-ship operation or a get a product off the ground (GSOT) operation.
A group buy is an agreement between a wholesaler or manufacturer and a reseller that allows the latter to sell products that the former has manufactured, but not the cost of those products. The reseller will pay the wholesaler a percentage of the retail price that the product sells for. In other words, instead of paying the wholesaler directly, the reseller pays a fee to the wholesaler for allowing the reseller to purchase a certain quantity of the product.
A group buy is most commonly used by larger businesses
A group buy is most commonly used by larger businesses in order to lower their total cost of goods sold, since they are buying in bulk from one supplier. Usually, the bulk buys will also allow the reseller to hire additional staff for stocking the products.
Group buys also provide a mechanism for brand owners to test out the offerings of another company without risking the financial investment of a full-scale launch. In other words, it is a great way to test the waters. While you cannot control the actual launch of the new company’s products, you can receive a free sample of its goods and wait for the consumer response to determine if this particular product line is something you would like to offer to your customers.
Group buys are often used by the same company so that they can test out the different pricing structures, product offerings, product lines, and even promotions. By using a reseller, the marketer can test different marketing methods before spending the money to launch their own campaign.
Group buys are generally open to all retailers, but sometimes there are companies that specialize in offering these services. The benefit to the buyer is the ability to purchase at wholesale prices. So, for example, if a retail shop gets to buy in bulk for five hundred dollars, then they would actually pay four hundred dollars, instead of five hundred.
Group buys are also sometimes used to test promotional campaigns, such as coupons or discount codes that can be utilized on certain items. As well, some resellers will test out different mailing lists because it can help them determine what customers are likely to want and for how long.
Group buys allow small businesses to reduce their overall marketing costs while still giving them exposure to various advertising and promotion options. This is an opportunity that should not be overlooked by any company.