Finding ways to save money creatively is sometimes a challenge. After all, there are only so many things you can cut from your budget. If you'd like to increase your savings, you may need to try an entirely different approach altogether.
Taking advantage of group-buy opportunities is one way to potentially increase savings on everything from dining out and entertainment to household expenses. The group-buy concept isn't new, but there are a few things you'll need to know to master it for maximum savings.
What Does Group Buy Mean?
Group buying is another way of saying "making a purchase to get a group discount." The idea is that the more people involved in the purchase, the lower the overall price is for each of them. Businesses often offer group discounts to encourage more customers to buy their products and/or services; they benefit from the uptick in revenue, while you (and the other members of the group) benefit by saving money.
How Group Buying Works
A group buy can be executed in a few different ways. The simplest and perhaps most obvious is to band together with a group of like-minded shoppers to take advantage of a group discount offered by a business. This type of discount can usually be found at places such as museums, amusement parks, zoos, aquariums, movie theaters, and performing-arts centers. Additionally, the following types of businesses may also offer group discounts:
- Cellphone companies
- Ski resorts
- Cruise lines
- Sporting event venues
- Lawn care and maintenance companies
Group-buy discounts can typically be found on the websites of these types of businesses. But these discounts assume you know the people you're purchasing the tickets with. For example, you may be booking a group trip to a concert or festival with some of your coworkers, or a trip to an amusement park with your church group. But what if you want to make a group buy and you're flying solo?
In that scenario, you still have options for group buying online. Groupon and LivingSocial are two of the best examples of how group buying works when you don't know the other members of the group. These sites feature daily deals that typically involve steep discounts on everything from dining to spa visits and child care.
Some deals have a limited number of purchases allowed, but others are unlimited, meaning anyone can scoop them up.
One thing to note about these types of group buy offers: Some of them are time sensitive.
For example, they may only be listed on the site for one day or just a few hours. You can stay on top of group-buy offerings by signing up for email alerts when you join one of these sites.
Pooling resources with your neighbors or locals in your area is a third way to execute a group-buy strategy. For instance, if you and your neighbors all pay for lawn care services or snow removal in winter from different companies, you may be able to save money by approaching a single company and asking for a group discount.
Organizing a local shopping club for groceries or other purchases is another way to potentially save. With a food-buying club, for example, you and the other members would purchase groceries at a discount from either a wholesaler or a local food supplier. This type of group-buy effort usually requires a little more organization, however, since you have to recruit members; contact wholesalers or local food suppliers; negotiate the discount; place orders; and schedule delivery or pick-up of the items purchased.
Can a Group-Buy Strategy Save You Money?
Yes, but the amount of savings can vary depending on what you're purchasing and how many people are in the group.
Assume you're planning a family reunion at a nearby theme park, for instance. The individual daily ticket rate is $39.99, but if you purchase 15 or more tickets, the group rate drops to $35 per person. If 20 people plan to go, you'd save $99.80 off the total ticket cost, not including sales tax and any additional processing fees if you're buying online.
That's a savings of about 12.5%, which isn't bad. But consider a potential oil change deal. The advertised rate for this deal is 47% off the original price of $75.97, for a final cost of $39.99. If you take advantage of this deal, you'd save $35.98.
The amount you can save with group-buy situations–from negotiating discounts on lawn care or organizing a food-shopping club–hinges primarily on how many members are in the group and the discount you're able to negotiate. The discounts are entirely up to the discretion of the business in those situations, so it's to your advantage to shop around and contact different companies to see what they offer.
Be sure to do the math on group-buy discounts. For example, say Company A charges $100 per month for its services and is offering a 10% group discount. That brings your total cost down to $90. Now, say Company B charges $150 per month for the same services, but it offers a 30% group discount. The higher discount may sound attractive, but you'd end up paying $105 per month, more than what you would with a smaller discount. At the end of the day, your group-buy efforts should be designed to yield the most savings possible.