Group buying guide launched for small businesses

Small businesses can now gain greater insight into the group buying channel, with the launch of a business guide designed to complement the Australian Group Buying Code of Conduct.

The Australian Interactive Media Industry Association, in conjunction with the Australian Direct Marketing Association, has launched A Business Guide to Group Buying.

The guide has been compiled to give advice on how businesses can benefit from using the group buying channel and how to avoid potential pitfalls.

It follows on from the Australian Group Buying Code of Conduct, announced by AIMIA and ADMA in November last year.

According to AIMIA and ADMA, the guide will help business owners understand their responsibilities to consumers, and manage the risks to ensure a “positive outcome for all”.

“Telsyte have predicted the Australian group buying industry will grow by 30% in 2012,” AIMIA chief executive John Butterworth says.

“As the channel matures, there’s a clear need for best practice guidelines for businesses.”

“The business guide…provides concrete advice to businesses to help them determine if group buying is for them.”

“[It will] help them structure a deal that will support their business growth and avoid possible problems that can arise if group buying offers are not managed properly.”

ADMA chief executive Jodie Sangster says the guide is another step to improving standards in group buying that will benefit both businesses and consumers.

The guidelines have been designed around specific considerations for businesses, including:

• Structuring a product or service offering for a deal that fits well with their business capacity, and sales and marketing strategy.
• Understanding the terms of the merchant agreement with a group buying provider.
• Preparing for the redemption or fulfillment of the offer.
• Tips for acquiring repeat business from group buying customers.
• Dealing with customer complaints related to the offer.
• Key legal issues and obligations to be aware of.

The most common complaints from group buying platforms are merchants who are unprepared for the volume of customers and do not understand the impact of discounts on the business.

“Once the deal goes live, you can’t change the coupon terms, so make sure you can fulfill the deal,” the guide says.

“Before signing the contract with the GBP, consider if you should cap the number of vouchers sold or restrict the time available to redeem.”

According to Telsyte senior research manager Sam Yip, partnerships between merchants and GBPs are only going to continue, so merchants need to ensure they partner with the right one.

“Work out what profile they’re actually targeting and whether that’s compatible with your service or product,” he told StartupSmart.