Group sale
| Group sale |
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Group sale is the kind of sale that offers a group of purchasers a fixed price for a product, provided that there are a minimum number of buyers for the product (N. Orfaly 2008, p. 3). Group sale is a strategy that focuses on increasing sales size to offset a reduced price. There may be various shopping patterns in the online auction industry. It depends on whether the reduced price is booked in advance or negotiated by the group leader (L. Xiong, C. Hu 2011, p. 3).
Group sales can contribute to creating a favorable situation for both producers and traders, providing producers with greater access and bargaining power in groups, and enabling traders to buy a significant amount of products (A. Awono, O. Ndoye, L. Preece 2010, p. 160). Promoting group sales can increase user engagement and thus increase the visibility of advertisers (A. T. Xavier 2012, p.1).
Advantages and disadvantages of group sale
Group sales can help sellers improve their financial condition compared to individual sales. Sellers can get higher prices for their products for three reasons: wholesale, better negotiating skills and classification. It also can lead to an improvement in the number of products they sell. People inside group sales can count on mutual help (A. Gyau, Ch. Mbosso, Z Tchoundjeu, D. Foundjem-Tita, E. Asaah, S. Franzel 2011, p. 625-626).
Sellers must secure products for group sales and resist pressure from local buyers who take advantage of periods of financial need, which is particularly difficult among less affluent sellers and as a result, those sellers sometimes must raise a loan (C. Facheux, Z. Tchoundjeu, D. Foundjem-Tita, A. Degrande, C. Mbosso 2007, p. 1252).
Group sale process
A group sale is a strategy that simplifies the merger between entities from the sub-sector, mainly traders and producers. The group sales process takes place in the following steps:
- To commercialize specific products, members of the group individually sort their products in different ranks.
- In the next step, the Marketing Specialist for each group determines the amount available, which is then transferred to sales groups (in general, telephone distance price negotiations are organized between traders and producer representatives).
- After both parties agree, they choose a market day, place and time to start the market.
- On the right day, each member of the group comes with his product, and all the products of the members of the group are submitted (after registration) for group sales.
- The distribution of revenues to each member according to the registered quantity takes place at the end of group sales and is carried out by Marketing officers and other members of the executive group (A. Gyau, Ch. Mbosso, Z Tchoundjeu, D. Foundjem-Tita, E. Asaah, S. Franzel 2011, p. 622).
References
- Awono A., Ndoye O., Preece L., (2010), Empowering women’s capacity for improved livelihoods in non-timber forest product trade in Cameroon, International Journal of Social Forestry (IJSF), 3(2)
- Facheux C., Tchoundjeu Z., Foundjem-Tita D., Degrande A., Mbosso C., (2007), Optimizing the production and marketing of NTFPs, African Crop Science Conference Proceedings, Vol. 8
- Gyau A., Mbosso Ch., Tchoundjeu Z., Foundjem-Tita D., Asaah E., Franzel S., (2011), Antecedents and effects of group sales on supply chain performance: The case of kola production and marketing in Cameroon, Journal of Development and Agricultural Economics Vol. 3(13)
- Kimes S. E., (1989), Yield Management: A Tool for Capacity Constrained Service Firm, Journal of Operations Management, Volume 8, Issue 4
- Orfaly N. (2008), Bidding system and method, United States Patent Application Publication, Pub. No.: US 2008/0126215 A1
- Wu P., (2016), Cloud computting and reccommendations for small businesses and chain store units, Eastern Institute of Technology
- Xavier A T., (2012), Methods and systems for gamifying coupom offerings, United States Patent Application Publication, Pub. No.: US 2012/0296730 A1
- Xiong L., Hu C., (2011), Hotel Viral Marketing via Social Networks: A Strategic Pricing Lesson from Group Buying, 16th Graduate Students Research Conference, Houston, Texas
Author: Katarzyna Satro
