Group Buying for Good

Arguably the hottest segment of the consumer web market is "flash sales," or email and web services that offer significantly discounted deals on local services, restaurants, getaways, and more. The market leader, Groupon, is estimated to do more than $500 million in revenue this year, which is no small feat for a two-year old company. But while many companies are rushing to the space to cash in on the trend, a new set are springing up to use group buying power for good.

At their core, most of these new companies share a similar model. They get companies to offer deep discounts on their products and services if a certain number of the item in question are sold. The value to the business is not necessarily primarily the profit they make, but their exposure to new customers.

Blissmo, a new San Francisco-based company, has a different idea. In their model of group buying for good, their goal is to make it easier and eventually, cheaper, for consumers to discover and buy from sustainable, ethical, environmentally-friendly businesses. The site is brand new, but early deals have included things like 50% discounts for a wine tasting at a certified green vineyard in Napa Valley.

According to Blissmo founder, Sundeep Ahuja, the goal is less about maximizing any individual transaction to maximize profit, and more about using the deals to connect healthy, sustainable consumers with the companies and brands whose ethos match their own. Ahuja, who was an early advisor to Kiva and Change.org among other social companies, tends to think that there are a lot more people who would be buying sustainably than those who are now, if it was easier and if they had good ways to learn about products that actually lived up to their values. For them, the deals are just a gateway into that longer-term relationship between consumers and producers.

Blissmo is not the only company that thinks there is an opportunity to use the group buying/daily deal model to mainstream sustainable consumption. While their focus is a holistic approach to integrating sustainable consumption, others are trying out different variations.

Portland, Oregon-based CauseOn just launched today with a promise of 20% of deals going to charity. Deals for Deeds collects Washington D.C. based deals - many of them with healthy lifestyle companies - and donates 5% to a one of a few charities. Bloomspot, focused on deals in SF, LA, and NYC, allows nonprofits to create community "circles." When members of a nonprofit's community circle buy one of the deals, Bloomspot donates a portion to the nonprofit. Groupon remains mindful of how to use its distribution network and "tipping point" model for good, recently announcing the launch of "G Team" to help leverage their community for good.

If the larger group buying market is any indication, there may be space for a lot of players. If the goal is -- as Ahuja put it -- to make sustainable consumption the rule rather than the exception, having a bunch of options with different types of deals for different locations might be the best way to regularize the behavior.

Even if none of them are going to make $500 million this year, companies like Blissmo are bound to push new ideas into the sustainable buying space, and that's a great deal at any price.

Photo credit: macinate