Biz Idea #23 – In the Know Marketing

by Byron on February 2, 2012

The Problem:

Everybody knows a friend-of-a-friend who works at soandso.  Everybody would like access to her to get her 50% employee discount from soandso.  Few people do.

The Business

In the Know Group Marketing Group.

Someone recently came to me and said, “My friend Joe has a friend Rachel who works at [Unnamed Luxury Brand].  She can get 40% off anything, but she can only place one order.  If you tell me a couple things you want by Sunday, you can get ’em for 40% off.  Just make a check out to Rachel.  She is only doing it for you because I vouched for you.”

I have no idea if this is true or not.  I trust my friend, but once it becomes third and fourth hand, who the hell knows.

But it caused me to think of a business.  You sell it the exact same way, except you negotiate a deal upfront with a retailer.

Now that I think of it, it’s similar to Groupon.  Except Groupon loses it’s fervor because everyone knows the only reason they can offer you this deal is either scale or because the product is inferior.  (Rarely, you find a gem because the product is simply undiscovered.)  But by definition, you know this deal isn’t “special.”  Everyone else who ordered in time got the same deal.  There is very little exclusivity.  (The only deals that will last for Groupon are the ones that continue to generate profitable customers.  And those are the deals that don’t need a time limit.  The time limit only exists in the long-term to create urgency.)

Doableness

Find a company that will give you excellent deals on their entire product line with volume purchasing.  Sell via a small network of in-the-know folks.

It’s doable, but this idea doesn’t scale.  Well, it does, but it’s called Groupon.  And, in case you can’t tell, I’m skeptical about Groupon being a long-term driver of value.  But on a small scale, it wouldn’t be crazy to find 35% off deals where the merchandiser will give you an additional 15% for selling it.  You could put together a deal to sell $25K worth of goods and you’d pocket $3750.  You could put together three of these per month.  It’s doable.

My Thoughts

This idea sucks.  As I wrote it out on the blog, I began to hate it.  But I didn’t even realize it’s relationship to Groupon.  If I had this idea five years ago, would it have caused me to think of Groupon?  Probably not, but it might of.  If you think like an entrepreneur, you will have brilliant thoughts and dead-end thoughts.  You have to explore all of the thoughts to some degree.  It is the exploration of these thoughts that sometimes causes the lightbulb to go on.

I thought of ripping down this post and doing a new one.  But that’s not the nature of this blog or the nature of being an entrepreneur.  You have to put it all out there, and come what may.  Moreover, my concept may give someone else the concept they need to create genius.

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