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Power of The Masses: Your Guide to Group Buying Websites

photo: /kallu

If the Internet and social networking taught us anything, it’s that there’s power in the masses. So it’s not surprising that millions of people are saving money daily on everything from dinners to spa services, thanks to online group buying websites.

These sites, which meld shopping with social networking, work like this: sign up to receive a daily deal email and get access to cut-rate prices on a host of products and services in your area. Some require a certain number of people to get the deal, while others reward you if you get more people to sign up.

Group buying sites are all the rage these days, with tons to choose from. Before you start scouring the web for deals or overload your inbox with daily discounts, here’s a look at some of the sites worth checking out.

Groupon.com

The granddaddy of group buying websites, Groupon.com was launched in Chicago in November 2008, expanded to four more cities (Boston, New York, Seattle and Atlanta) in Spring 2009, and has since pretty much invaded the country, as the group-buying trend it helped start exploded in popularity. Now serving 29 million subscribers in more than 300 cities in 31 countries, Groupon negotiates discounts of 50% to 90% on local goods, services and events, and then offers the deals to subscribers in a daily email. It currently offers about 400 deals each day. Everyone who purchases a deal, or Groupon, basically receives a coupon for the advertised price, having paid the discounted amount.

Each morning, subscribers receive the daily deal via email, and have a limited amount of time to act on it. Deals only go through when a minimum number of people agree to buy.  Members can get deals on everything from restaurants to concerts. For example, Charlotte, North Carolina members were recently offered the chance to save 53% off a one year membership at the McColl Center for Visual Art. If you live in Little Rock, Arkansas, recently you could have saved 71% on two private and two group dance lessons at Arthur Murray Dance Studio.

In addition to the coupon savings, Groupon will give you a $10 credit for each member you refer who purchases a deal. And it recently launched a loyalty program, offering points for each Groupon purchase (and you get a bonus if you buy before the deal “tips”), as well as for simply viewing each day’s deal. Collect enough points (or “G’s,” as they’re officially called), and your next Groupon might be free!

LivingSocial.com

Just like Groupon.com, with LivingSocial.com you get access to deeply discounted deals on restaurants, spas, healthcare and local events in your neck of the woods. The company boasts savings of 50% to 70%. Each deal stays live for 24 hours and is available to anyone who purchases it. LivingSocial, which is available in 111 cities in the United States, the U.K., Canada and Ireland, has people on the ground in every market it operates in, which the company says provides members with the best a city has to offer.

Word of mouth with LivingSocial has its rewards too. If you refer three friends to a deal and they participate, you get the deal for free.  A recent deal being offered by Livingsocial.com for Honolulu residents was $120 to spend on glasses or contacts at Family Vision Care for $60.

Facebook Deals

Not to be left out of the group buying craze, Facebook recently launched its deal service through the Places function of its iPhone app, or http://touch.facebook.com/. Instead of offering one deal a day, the social networking juggernaut lets local businesses offer you rewards when you “check in” via Facebook. Let’s say you’re looking for a deal on lunch. Check in with Facebook as you visit a local eatery, and if there is a deal to be had you can download the coupon to your phone.  Deals include individual discounts, free merchandise or rewards group deals, loyalty deals and charity deals.  National retailers like Gap and Macy’s also offer discounts through the service.  

Mamapedia.com

Let’s face it: raising kids isn’t cheap, whether they’re newborn or teenagers. Mamapedia.com tries to alleviate the costs by offering discounts on family-focused products and events. You get exclusive local deals on family-friendly restaurants, family entertainment, kids activities; mom-geared offers on spas and moms-night-out locations, as well as deals from national retailers like CafePress.com and eBags.com.  The service is available nationally and rewards you for getting friends to join. You get $5 credit for signing up and a $10 credit for every friend you refer that makes a purchase.  Since there is no limit on how much credits you can get, the savings could be substantial — if you have a lot of friends, of course.

Homerun.com

Trying to stand out from the pack, Homerun.com melds social networking into group buying. Like the other group buying websites, Homerun.com offers a daily deal on restaurants, spas and fitness classes, to name a few, with a minimum number of purchases required for the deal to kick in. The company also lets members post comments about a local business and see what other friends on the website are buying.  The more active you are, the more points you earn and the more special offers you get.  Some of Homerun.com’s deals are called “Avalanche deals,” which means their price keeps getting lower as more people purchase it. At the end of the day, everyone gets the lowest price.  Members of Homerun.com in Atlanta were recently offered the chance to save 56% off a one-hour massage.

Scoutmob.com

Targeted at mobile phone users, ScoutMob.com offers local discounts, largely on restaurants, without having to pay anything upfront.  Like the other group buying sites, you get a daily deal via email with a limited time to act on it. But with Scoutmob.com, you aren’t required to purchase the deal. Simply download the discount to your phone and show it at the business offering it. Scoutmob negotiates deals with local proprietors in Atlanta, San Francisco and New York City, with more cities coming soon.  San Francisco residents were recently offered 50% off their meal at Live Sushi Bistro.