When the U.S.-based company Groupon morphed its “collective action” website about 18 months ago into a commerce-driven model, business exploded. It seems web-users were very interested in participating in group buying — where local daily deals with restaurants and spas are offered to users. If enough people sign up, the deal is a go.
Today, Groupon’s valuation is a reported US$1 billion with more than $300 million in annual revenues. So it’s no surprise that two Canadian entrepreneurs recently launched their own group-buying website called GroupClick, which offers a daily deal on the best local goods, services and cultural events in Toronto.
“The great city of Toronto is Canada’s largest city and is one of the most visited places in the world, with a host of exciting attractions, events, restaurants, shops and entertainment venues,” said GroupClick co-founder Gary Lipovetsky, president of the Toronto-based MenuPalace.com. “GroupClick will introduce these businesses to thousands of new customers, and those customers will save lots of money.”
This is how it works. GroupClick negotiates deals with businesses looking to attract new customers with no upfront fee required. For example: a $75 meal card is offered for $29.99. Then, GroupClick subscribers receive free daily emails alerting them to that day’s special deal. But the deals are only activated if a minimum number of people agree to buy in, encouraging subscribers to share the deal with family and friends via social media tools such as Facebook and Twitter.
By guaranteeing a large number of new customers, GroupClick believes it’s creating a win-win for restaurateurs in Toronto and the surrounding area. The deals are redeemable for a set period of time, with restrictions on number of deals used per table. Once a deal is closed, GroupClick immediately sends the operator their cut of the take.
Lipovetsky believes the innovative approach to e-commerce will generate millions for local businesses while delivering subscribers great prices. “GroupClick brings buyers and sellers together in a fun and collaborative way,” said Lipovetsky. “We offer the consumer a great deal they can’st get anywhere else and deliver the sales directly to the merchant.”
GroupClick has also pioneered an “ambassador program,” where GroupClick followers can earn money, without any fee, by referring friends, colleagues and family members to sign up for a deal.
Whenever a referral makes a purchase, GroupClick will pay the ambassador a generous portion of the price of the deal.